They did lay off their Servo developers, and a few of their Rust developers.
They did not lay of all of their Rust developers, or even most of them. WebRender and Stylo are now integral parts of Firefox, and are actively maintained by teams of people, and a lot of new code continues being written in Rust.
The Servo DOM and HTML engine is massively complex - far moreso than Stylo or WebRender - and nowhere near ready for production use. Mozilla decided that rewriting the remaining parts (read: vast majority) of Firefox slowly, in-place, would be a better path forwards than maintaining two massively complex browser engines in parallel and trying to swap it out completely.