Boulder-based robot toy maker Sphero laid off 45 employees, roughly a quarter of its staff, after a lackluster holiday selling season and will refocus on educational robots, the company confirmed Monday.
“While sales weren’t quite what was expected, this move allows us to capitalize on the business that allows us to grow and shine,” said Claire Tindall, a company spokeswoman. “We’re not walking away from our current business. This is a pivot and it’s an initiative that doesn’t happen overnight. It’s a new alignment but we’ll still have a retail presence.”
Affected employees, who were notified Friday, were mostly based at the company’s Boulder headquarters. The cuts were “across all departments,” Tindall said. The cuts don’t affect Misty Robotics, which spun out of Sphero last year to build personal home and business robots. The layoffs were first reported by tech news site TechCrunch.
The toy maker has been on a roll since the start of its 2015 partnership with The Walt Disney Co. and the Star Wars brand. Sphero hit it big with its take on the Star Wars droid BB-8 robot, a mobile app-controlled toy that rolls around much like Sphero’s original robot. The BB-8, priced at $149, sold out in many stores the first day and BB-8 sales in the first month nearly matched Sphero’s robot sales for the entire prior year.
The company has sold nearly 3.4 million toys, compared to 2 million a year ago. Staffing grew from more than 50 people in 2014 to about 170 last month.
The company went on to raise more than $100 million from investors that included The Walt Disney Co. The most recent investment of $35 million occurred last spring.
Sphero spent 2017 releasing a record number of toys, including Star Wars droids R2-D2 and BB9E, plus robots for other Disney brands, including an interactive Spider Man and race car Lightning McQueen from the Pixar movie “Cars.”
But all Star Wars toys apparently had a rough holiday season as consumers felt “movie fatigue,” according to a Bloomberg News report. Star Wars lost its No. 1 rank during the season and Star Wars toys fell from 2016 even though 2017 had a new movie, market researcher NPD Group told Bloomberg.
But while droids received enormous attention, Sphero’s educational line, SPRK+, has thrived in schools nationwide as children used the robot to learn the basics of computer programming. Sphero robots are now in more than 6,000 schools nationwide.
And Tindall added that the emphasis on educational robots doesn’t mean it’s giving up on retail.
“The move into education doesn’t mean solely classrooms, though it’s definitely a big piece of that,” she said. “It involves the consumer and what we do with retail.”
Last month, Sphero offered heavy holiday discounts on its robots, with its $179 R2-D2 on sale one day for $99.
“Speaking for myself, in my eyes it wasn’t a surprise. There comes a time in business when you have to right size the business to align with your vision,” Tindall said. “We still consider ourselves a startup.”