Intel calls sacking „redeployment” and we have some good news for Larrabee team. According to Intel’s spokesman “We (Intel) do not anticipate any redeployments as a result of this announcement. Intel is quite official that it won't cut the big pieces of team and trash the graphics effort, they will continue. 

Intel continues to play with Larrabee and the project is far from dead. The important thing is that plans to launch computer graphics hardware are canceled for the time being, but Intel will continue to invest and play with graphics.

Intel continues with a well-tailored statement: “Larrabee silicon and software development are behind where we had hoped to be at this point in the project. As a result, our first Larrabee product will not be launched as a standalone discrete graphics product, but rather be used as a software development platform for internal and external use.” This is something that you could read before, but it at least implicates that the project is still alive.

Knowing Intel, they will come back and they will continue to play with its GPU project until they launch the one that can compete with Nvidia and ATI, but be aware they aren't sleeping either.