Not a surprise, unfortunately; as newspapers cut back, stand-alone book sections have become regarded as a luxury that don't support themselves through advertising. (The Los Angeles Times dissolved its book section in 2007, and dismantled its Metro/California section this week, showing the difference between the two papers; the Post is reacting to nearly inexorable market forces, while the Times is being run by chimpanzees who shouldn't be in charge of watering a ficus, much less running a once-great newspaper.)
A group of readers and critics signed a "Keep Book World" petition written by the National Book Critics Circle, but it didn't change things. The only thing that could've saved the situation was more print advertising by publishers, and they're spending their promotional budgets in other places these days and probably forever.
So the Post's book criticism and news is going to move into other sections -- Style, Opinion, etc. -- and the staff (which was already down) is going to remain in place, at least for now. I'll miss the good writing in Book World, and I want to thank my fine editors, Dennis Drabelle and Ron Charles, as well as the others I worked with who have gone on to other things: Jabari Asim, Chris Lehmann, Marie Arana, and the rest. Good luck to all of you, and thanks for your utter and complete professionalism.