The source is me. I am in the industry and a lot of my friends who worked at both ILM and Weta Digital were laid off after the movie. And it isn't specifically James Cameron who is doing it so much as the studios. Effects artists are credited (when they do get credit) after things like accounting and catering. We work long hours and get decent enough salaries... but absolutely no job security. As soon as some other country has a tax credit or cheaper labor, our jobs vanish but the studios keep raking in the money like there is no tomorrow. Most of the top grossing films over the past decade have been effects driven, but the number of effects jobs in the U.S. is barely holding on.
Don't get me wrong, I actually enjoyed watching Avatar (mainly for the effects though I am not totally immune to cheap emotional manipulation). I thought on that front it is brilliant. I have a huge respect for the artists who worked on that film (and not just because many of them are my friends). It is just that I felt the story was total crap (and I'm not alone in that regard). That doesn't mean you have to think it is bad. This is just my opinion. Some of my favorite movies would most likely make you cringe (they are that bad). I'm no expert film critic.
Still, I suspect that had the story been almost 100% the same, but there had been no visual effects, the movie would have more or less tanked. To see it make that much money and then see my friends scrambling to try and find another job before their cobra runs out pisses me off.
And you are correct. I shouldn't have dragged Cameron into it so much. I think he could do a damn sight better when it comes to sticking up for the people who make his movies so successful, but he isn't the one directly laying anyone off. Still, it would have been nice to have him respond to this open letter:
http://leestranahan.com/open-letter-to-james-cameron-fairness-for-visual-effects-artists