Maybe it'll also mean turning off user generated content too, and only have admin made posts, the same as Digg did. They could hire the power-users to keep making the relevant posts.
People you don't have on contract are a liability
That's the whole point of reddit; for various reasons they convinced people to give them fuckloads of free labor.
Reddit brilliantly acted like "king" giving fiefdoms out to mods and pretending like it was "theirs." "Here, dear mod! Here is some internet land to rule mostly as you see fit."
Well...the king demanded a huge tithe, a good portion of the lords told the king his mother was a hamster and his father smelled like elderberries....and the king is now laying down the law and making it very clear who everything actually belongs to.
The problem is: without any lords, the king has no power, because he can't possibly administer all the fiefdoms himself...and right now, a lot of the peasants really fucking hate the king, and like the lords.
Right now spez is trying to scare mods straight and reward those who toe the line by redistributing fiefdoms to them.