They just announced plans to lay off another 2,500 people, or 40% of their workforce. I think you'll see a number of European routes hit with further reduced service (perhaps moving to a quasi-low cost, Ryanair type of service), but the transatlantic routes will remain the primary profit center. EI won't become a OW casualty, rather they'll become increasingly irrelevant to the alliance as a bit-player.

The Irish government won't let Aer Lingus fail - it will survive (in one form or another) because the Irish economy is simply too dependant on the national carrier.