Sources told The Next Web, which first reported the story, that the app is not making enough money amid stiff competition from other mobile photography apps, like Instagram and Camera+. Hipstamatic, which is ranked in the top 100 paid iPhone apps on iTunes, generates most of its revenue from in-app purchases of lens, films and virtual camera cases.
Molli Sullivan, director of communications at Hipstamatic, insists that the lay-offs were part of a restructure. "We're not going anywhere, Hipstamatic is here to stay," she wrote in an email to Mashable.
"We're super excited about all the potential with Snap [and] Incredibooth... and we have some other new stuff coming soon," she added. Snap, a monthly magazine for the iPad about photography and culture, has released two issues to date.
The timing of the news is surprising. Hipstamatic announced just Wednesday a partnership with W magazine involving the release of a free "Hipstapak" containing a magazine-inspired film, lens and virtual camera case, as well as a photography contest and gallery show.
While it doesn't seem like Hipstamatic is set to disappear from the App Store, these developments do raise questions about the company's future in a very competitive space. We should know more about the restructure and what that entails in the coming weeks.