According to news on Online Onslaught, the WWE issued a statement that Steve Austin was released.

I agree with Rick Scaia though: with the frequent mention of it on Smackdown! on Thursday, and the fact that the story is being given major airing on Confidential this weekend, I'm anticipating it being a work.

Now that I think of it: Austin got a major hype spot on Confidential last week too. That makes the story more suspicious too. You don't make a big deal about a performer one week then fire him the next