One of the latest victims of the new round of job cuts at AMD is the company's Operating System Research Center (OSRC) in Dresden, Germany. I suppose this means AMD's Linux support will be severely diminished as the OSRC was responsible for many Linux kernel tasks like adding support for new CPUs and chipsets, coding support for features like PowerNow and Turbo Core, making compiler optimizations, adding virtualization improvements, documenting features for the open-source community, etc.
The open-source AMD Linux graphics team isn't part of the OSRC though, so the development of Radeon HD drivers for Linux is currently not in danger. The news may not have major implications in the consumer market because only a small percentage of PC users run a Linux distro, but it's likely going to have a major impact on AMD's marketshare in the server market.
While working on the kernel's IOMMU and KVM support, one of AMD's former employees contributed to the development of the "IOMMU groups" feature that was integrated into Linux 3.6; this feature provides the basis for a new Linux 3.6 technology that allows a host's PCIe devices to be passed through to virtual machines and can also be used with Intel CPUs.
A look at the patches contributed to the Linux kernel by AMD employees reveals that the closure will cause AMD to lose almost all developers who have recently submitted major changes to support new AMD processors and chip sets in Linux. The OSRC had around 25 employees who also helped integrate important changes for new AMD platforms into Linux distributions such as Red Hat Enterprise Linux (RHEL) and SUSE Linux Enterprise. Some of the OSRC developers also worked on open source virtualisation solutions such as the Xen hypervisor.