In response to our story yesterday about Electric Sheep Company dropping a third of its staff, the Sheep's Valerie Williamson chimed in to assure us that Electric Sheep Company had grown tremendously through the year so far.

Maybe that's so, and I hate to look like I'm knocking Ms Williamson (I'm not), but that's straight out of the layoffs handbook.

Dig back through major layoffs at any corporation, and the press releases and company statements surrounding them. Lots of press and media releases are put together like recipes, these days - enough that entire families are self similar. This one gives the appearance of being a member of the dotcom cash-burn-rate panic family - which is also popular with large corporates about to announce a large quarterly or annual loss on their earnings report.

The formula for that is a fairly simple one.

  1. We're getting rid of staff. A very large percentage of staff.
  2. We've grown a whole lot! Ton of new business, clients, markets, partnerships, whatever. You wouldn't believe just how well we've been doing! (alternative: This is just routine for this time of year)
  3. We're refocusing our business.
  4. We have a great team and this is good for us.

Just about every press release about large layoffs gives the same four points.

What's missing is usually a fifth point. Something like: "Costs have grown faster than revenue / we're running out of cash / our projects are much more expensive than we expected."

It's conspicuous for its absence at the time - you generally don't see it until you get to the quarterly or annual earnings statements.

Sure. These things happen. They happen in pretty much every business at one time or another, often annually in the bigger corporations.

Here's what Ms Williamson had to say on behalf of the Sheep (with some notations of our own in bold):

(point 2) The Electric Sheep Company has gone through tremendous growth over the past year. We successfully serviced our great portfolio of clients and have built incredible applications to make virtual worlds easier. (point 3) In 2008 we see the market shifting and have restructured our company to focus on large programs for our customers, while also building our own technology and software applications for virtual worlds. (point 1) We are reorganizing our resources to better fit this focus and unfortunately that means losing some of our people. While this is difficult, we're extremely positive about the future of the Metaverse and the company, (point 4) and believe we have the best team in place to take The Electric Sheep Company and the industry to the next level.

As a contrast, Take Two's CEO Ben Feder: "Take-Two is well-positioned to capitalize on the growth of the video game market as next generation consoles gain traction. Our creative teams are delivering a strong and increasingly diverse product portfolio, including our successful new BioShock franchise. We are looking forward to our 2007 holiday line up, as well as our solid 2008 slate, which includes the release of Grand Theft Auto IV in our fiscal 2008 second quarter".

Accompanied by news of upcoming restructures and layoffs.

Or last June, where MMO Publisher NCSoft attributed an immediate restructuring (layoffs) to 'growth'.

Look, maybe a couple projects just aren't going anywhere. You kill those, take up the staff, if you have places for them and move on - if so, we'd be happy to hear more about that. If that's the case, though, why the dotcom panic-button formula statement?

This article was originally published on Massively.
Yesterday in Second Life, Monday 17 December, 2007