from the Wikipedia entry on de Saussure:
"most modern linguists and philosophers of language consider his ideas outdated" - par. 1
Saussure's most influential work, Course in General Linguistics (Cours de linguistique générale), was published posthumously in 1916 by former students Charles Bally and Albert Sechehaye on the basis of notes taken from Saussure's lectures in Geneva. (Legacy, par. 1)
language may be analyzed as a formal system of differential elements, apart from the messy dialectics of real-time production and comprehension. Examples of these elements include his notion of the linguistic sign, which is composed of the signifier and the signified. Though the sign may also have a referent, Saussure took this last question to lie beyond the linguist's purview. (Legacy par. 2)
Saussure posited that linguistic form is arbitrary, and therefore all languages function in a similar fashion. According to Saussure, a language is arbitrary because it is systematic in that the whole is greater than the sum of its parts. Also, all languages have their own concepts and sound images (or signifieds and signifiers). Therefore, Saussure argues, languages have a relational conception of their elements: words and their meanings are defined by comparing and contrasting their meanings to one another. For instance, the sound images for and the conception of a book differ from the sound images for and the conception of a table. Languages are also arbitrary because of the nature of their linguistic elements: they are defined in terms of their function rather than in terms of their inherent qualities. Finally, he posits, language has a social nature in that it provides a larger context for analysis, determination, and realization of its structure.(Legacy par. 5)
Holland notes that up to the 1950s Saussure enjoyed some legitimacy in linguistics, but with the cognitive revolution which began in 1957, Chomsky had "decisively refuted Saussure." She writes: "Much of Chomsky's work is not accepted by other linguists . . . I am not asking you to accept Chomsky's own linguistics, however. My point is simply that Chomsky's work rendered Saussure's linguistics, indeed much of post-Saussurean linguistics, obsolete. I am not claiming that Chomsky is right, only that Chomsky has proven that Saussure is wrong. Linguists who reject Chomsky claim to be going beyond Chomsky, or they cling to phrase-structure grammars. They are not turning back to Saussure."
"Saussure, considered the most important linguist of the century in Europe until the 1950s, hardly plays a role in current theoretical thinking about language." Koster, Jan. (1996)
"Saussure's views are not held, so far as I know, by modern linguists, only by literary critics, Lacanians, and the occasional philosopher." Holland, Norman N. (1992) The Critical I, Columbia University Press, ISBN ISBN 0-231-07650-9, p. 140.