Shares sold short in Twitter Inc. (NYSE: TWTR) rose 7.5 million to 54.3 million in the period that ended October 14. That was 9% of the float, and it was posted a few days ahead of rumors that Twitter will lay off hundreds.

Reasons for the large short interest are not any secret. Its number of users has stalled at just above 300 million. While Facebook Inc. (NASDAQ: FB) and LinkedIn Corp. (NYSE: LNKD) have proven they can make money on their user bases, Twitter has not. The turnaround that has been promised quarter after quarter has never materialized.

Twitter’s share price skyrocketed recently as many investors believed it would be taken over. There were several rumored candidates, led by Salesforce.com Inc. (NYSE: CRM). Twitter’s shares surged to $25, and then dropped quickly back to just above $17 when it was clear the rumors were not true. Though they have ticked up again slightly on rumors that Walt Disney Co. (NYSE: DIS) might be a suitor.

The upcoming layoffs are probably meant as a means to move the company toward profitability. They also will show that a fix of Twitter could be many quarters away, if it can be fixed at all. In the meantime, they certainly will undermine what already has to be high anxiety. According to Bloomberg:

Twitter Inc., having failed to sell itself, is planning to fire about 8 percent of its workforce as the struggling social-media company prepares to go it alone for the time being.

Twitter may eliminate about 300 people, the same percentage it did last year when co-founder Jack Dorsey took over as chief executive officer, according to people familiar with the matter. Planning for the cuts is still fluid and the number could change, they added. The people asked not to be identified talking about private company plans.

An announcement about the job reductions may come before Twitter releases third-quarter earnings on Thursday, one of the people said. A Twitter representative declined to comment.

Twitter, which is unprofitable, is trying to control spending as sales growth slows.

Some of the short sellers have done well.

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