Though specific jobs were not specified, Blizzard stated that "approximately 90%" of the reduced positions were not related to game development.
The World of Warcraft development team will not be affected by the cuts at all.
"Over the last several years, we've grown our organisation tremendously and made large investments in our infrastructure in order to better serve our global community," Blizzard co-founder Mike Morhaime said.
"However, as Blizzard and the industry have evolved we've also had to make some difficult decisions in order to address the changing needs of our company.
"Knowing that, it still does not make letting go of some of our team members any easier. We're grateful to have had the opportunity to work with the people impacted by today's announcement, we're proud of the contributions they made here at Blizzard, and we wish them well as they move forward."
Blizzard reiterated that the job cuts will not impact the company's current development and release schedules.
A specific release date for Diablo III is expected in the "near future", which will fall some time during the year's second quarter.
The studio is also currently developing World of Warcraft: Mists of Pandera, Blizzard DOTA and StarCraft II: Heart of the Swarm, which are all approaching their beta testing phase.
Blizzard ironically ended the announcement by saying the company is currently recruiting and hiring for a number of positions.
Watch Diablo III's opening cinematic below: