Yes, it's true, to an extent. The whole department isn't going away, but many resources are.
Ten engine companies, four ladder companies, and one special technical resource were closed permanently on July 2, due to lack of staff. The staff that had run those companies - roughly 190 personnel - were demoted to fill in positions elsewhere in DFD.
Overtime has been forbidden for the rest of the 2012-2013 fiscal year.
Standard first alarm/box responses have been cut from 3 engines 1 ladder 1 chief to 2/1/1.
160+ more members were laid off earlier in June.
Detroit is in dire straits, and if you have any sightseeing to do in the Motor City, I suggest you do it fast before it burns.