Chad Hurley and Steve Chen‘s new company just laid off a significant portion of its workforce, but the YouTube co-founders insist that their relatively new online video platform is in good shape. Despite reports that Hurley and Chen’s Avos Systems has laid off 80% of its employees, the company is apparently “all in” on MixBit, the app that allows users to shoot, edit, and “remix” video clips.

Avos’ holdings include a few notable web properties, including bookmarking site Delicious, but the company seems as if it will now devote the bulk of its resources to MixBit. “MixBit is most definitely not shutting down, quite the opposite,” Avos said in a statement. “We’re really excited about MixBit and have been focusing our efforts around it. You can expect many new features very soon.” Hurley said the same thing, albeit in a much more flippant tone, in a pair of tweets sent out yesterday:



Since Avos is putting all its eggs in the MixBit basket, Hurley is naturally going to hype the platform’s potential. Still, it’s easy to speculate about uncertain nature of the app’s future. After all, MixBit hasn’t really caught on; aside from Hurley’s video of the Kim Kardashian/Kanye West engagement and the subsequent lawsuit that the celebrity couple fired Hurley’s way, we haven’t heard much about the app since it launched last August.

MixBit is still very new, and it still has potential for growth, since it is fun, easy to use and very pretty. The new features Hurley is hyping could very well be game-changers. Right now, though, there are a lot of red flags.

For starters, the MixBit Android app has been downloaded fewer than 50,000 times. Six months after the respective launches of Vine and Instagram Video (the two platforms assumed as MixBit’s biggest competitors), they were online video sensations drawing the attention of millions of users and forward-thinking brands. MixBit hasn’t seen the same immediate impact, and with the news of Avos’ layoffs, it is hard to believe the platform will strike gold in the way its founders want.

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