In Reddit vs. Wall Street, what are the ramifications of those who had money with the bankrupt firms?

What brokerage firms have failed or are about to fail because of GameStop? It's the hedge funds who got whacked not the little guy.

But I can't help but think that the investors of some of the now bankrupt firms will just go on to find other highly paid jobs, but what about the layman?

Investors don't have to find other highly paid jobs if a firm goes under. The employees must do so.

Hasn't a large number of normal people's 401k, college funds and other assorted savings, just gone down the toilet?

Reputable money managers of 401k plans etc. do not and did not short large amounts of GameStop (140% of the float) resulting and vast loss of normal people's life savings. It's the speculative hedge funds and speculative traders who got whacked. Affluent people invest in hedge funds because of the higher potential for profit which is a double edged sword with higher risk. The winner in the GME contest was the average Joe on Reddit.

Short-sales are a financial gamble which has (as we see right now) a very high risk. Most financial products which are meant as long-term saving products for consumers specifically exclude such gambles and stick to more conventional financial instruments instead. In fact in many places in the world it would be illegal to advertise a product as a capital investment or even a retirement fund for consumers when it includes financial instruments with too high of a risk level.

One of the main losers of the current GameStop short squeeze is the company Melvin Capital. That's not a company which works with "common" people. Their website is just a business card (and it looked the same a couple month ago). They look like the kind of company who won't take you seriously unless you bring at least a couple hundred million dollar to the table.

So no, the direct losers of this short squeeze are not middle-class people with retirement accounts. They are upper-class people with millions or even billions of net-worth.

But nevertheless, if this causes a couple of large finance companies to go bankrupt, then that could cause waves which might still affect private people. It's very well possible that some of the "losers" are publicly traded companies themselves, which might in turn be partially owned by other publicly traded companies, which might then appear in the portfolio of index funds and managed funds owned by small investors. So some indirect damage to small investors isn't completely out of the question.

what the ramifications are for those whose money Wall Street was managing?

Nothing drastic will happen to people who are reasonable: people who are not going to retire for another 10 years and decided to invest their retirement money into "dynamic" (read: risky) financial instruments have lost some of their money. They will earn that money back in a few years, because the whole point of risky investments is that they bring more profit on average than more secure investments.

People who are close to retirement should not invest in speculative trading unless they can accept the losses.

It's not likely that normal people's 401k, college funds and other assorted savings are invested in hedge funds. Hedge funds typically attract large institutional investors like pension plans, university endowments, and family foundations. You may also get some individual investors, but by law, only "qualified investors" can invest in hedge funds. That law sets an income threshold (which is seriously out of date) for individual investors, so basically you have to be "rich."

So who got hurt? Probably not a lot of "normal" people. Not directly, anyway. Hedge funds are considered high risk, so losses are not unexpected. This may be a disaster for the fund and its managers, but the investors will probably just chalk it up as a loss and hope to offset it with other investments.