Scrooge McSheep Cans 22 ESC Employees One Week Before Christmas

by Alphaville Herald on 17/12/07 at 8:25 pm

Tiny Tim despondent – lumps of coal and company restructuring for the holidays

by Pixeleen Mistral, National Affairs desk

Jeremy Vaught reports on the Second Life Podcast blog that 22 employees of the Electric Sheep Company will have a permanent holiday this Christmas – leaving them plenty of time to select and wrap presents and visit their families, now that they have been sacked by the metaverse development company.

Reportedly, ESC cited financial problems and is “refocusing the business”. The group working on MTV projects is apparently still intact, but speculation is that they may be discarded at a later date now that the company is focusing on “technology like onRez”. OnRez is a shopping site for purchasing virtual clothing and accessorizing SL lifestyles with possible holiday gifts such as latex school girl outfits, and whip marks and everhard prim genitalia.

OnRez sells milk and cookies, too

Joel Greenberg’s Virtual World Ad Network has also been shutdown as part of the ESC company restructuring. According to an e-mail send by Mr. Greenburg to those who had signed up for updates on the project the ad network was about a month away from going into beta test. Tiny Tim was unavailable for comment at press time, but the ghosts of Christmas past, present, and future were reportedly planning a midnight visit to the ESC headquarters.

42 Responses to “Scrooge McSheep Cans 22 ESC Employees One Week Before Christmas”

  1. Giff Constable

    Dec 17th, 2007

    Hello Pixeleen. Yes, I will confirm that we did indeed reorganize the company today and with that came a number of layoffs. It is certainly not a question of financial problems by any means, but rather a decision that we had to focus the business on a few key areas, and we had to change the shape of the organization for what we expect 2008 to bring. This is an undeveloped, emerging market space and one has to be flexible and as focused as possible. We remain extremely bullish on the virtual worlds space, but we expect 2008 to grow in different ways and are restructuring accordingly.

    We experimented last year on a number of technology initiatives, many oriented around Second Life, and it is only prudent to continue evaluating those efforts for investment required and revenue opportunities available. We decided to end funding for projects like the SL search engine and the ad network. We are continuing to invest in the OnRez Viewer for Second Life, we are continuing to run the Shop OnRez service, and we will be focusing on a few other strategic projects.

    The virtual world space in general is also diversifying to a larger number of platforms, which cannot surprise anyone on the Herald staff.

    There is no question that the timing is awful, and it is always rough to let good people go, but once we had made a decision around what we wanted ESC to look like in preparation for 2008, we had to make a decision on whether to be upfront with people or drag things out and leave them in the dark. Whether this happened today or in a few weeks, a reorganization that includes layoffs is a painful thing for the people being laid off, and I won’t try to dance around that fact.

    p.s. “wasn’t available at press time” ? Well you did only reach out to me 30 minutes ago. Come on now, this is the Herald, did you really want me to respond and throw off the story?

  2. Nacon

    Dec 17th, 2007

    Hey wait a minute…. does this means SL Herald all of suddenly cared about them in spiritual time for Christmas?


  3. Oh Brother

    Dec 18th, 2007

    If these 22 people were depending on making a living off the internet with a company that hires people on a part time basis, then they needed a serious dose of reality.

    Wake up. People lose their jobs, what, making $8.00 an hour? It’s called running a business, not a tabloid.

    This, much like everything else this place publishes, is not news, just slanted propaganda.

  4. Pius Darwin

    Dec 18th, 2007

    Its good to have such prompt responses from people at the ESC.

    Giff, I’d be really interested if you could share a couple of lines on what changes you are expecting in 2008 – both in virtual worlds in general and in your company.


  5. Obscure Doodad

    Dec 18th, 2007

    Hey guy, don’t close your comment hammering the Herald. Close your comment noting your own pathetic skills at revenue projections and sales forecasting and and let’s toss in cash flow predictions too. Helluva job you did on that, yes? Wow, how diabolical the universe is to conspire to trot along looking peachy keen until SUDDENLY, the week before Christmas, those numbers collapsed and only then became clear that the time had come for a 33% layoff. I’ll bet those sales numbers were just discovered to be short this week, eh? How positively astonishing. And wow, it really is rough to dismiss people, isn’t it. Striking forth in new directions and “positioning” the business for exciting opportunities next year just makes one’s heart go pitter pat, don’t it?

    Or maybe you decided it would be easier for management to face their early January Board meeting if you could show how forthright and aggressive management is protecting the shareholders’ money and there was no need, no, none at all, for the Board to seek management alternatives — like maybe some sufficiently competent to project cash flow a bit more accurately than 33% of payroll.

    I hope you send a nice Christmas card to all your booted folks.


    Dec 18th, 2007

    Giff, just a FYI, public image, for a company like yours, is kinda a big thing…you MIGHT wanna sorta maybe have thought of the impact vs. cost of hanging on to those folks till AFTER the holiday season over being in such a rush to let them go. It might end up costing you more in image that it would have cost you in cash to hang on to them.

    Also, I would be VERY careful in the terminology you use. Did you fire these employees, or lay em off? The ways you word things could allow someone to come back with, say, an unemployment claim and slap you in the ass but good, all cause you wanted to use the nicer sounding word in a comment.

  7. poindexter nerd

    Dec 18th, 2007

    “There is no question that the timing is awful, and it is always rough to let good people go, but once we had made a decision around what we wanted ESC to look like in preparation for 2008, we had to make a decision on whether to be upfront with people or drag things out and leave them in the dark.”

    Yes no question that when you set out to ruin peoples holidays it is alway much better to do so before said holidays.

    Also, I’m quite sure ESC’s decision to ‘reorganize’ has nothing whatsoever to do with the Hindenberg like implosion of the CSI project.

  8. Lewis Nerd

    Dec 18th, 2007

    Thankfully there are still plenty of SL development companies – like me, – able to undertake builds for people, and I won’t be laying any staff off at any time because there’s just me, guaranteeing your personal service at every step of the way.


  9. Bigboybilly

    Dec 18th, 2007

    Geez, I know its rough to get laid off. Having worked in Silicon Valley it happens pretty often to folks. But honestly, I don’t know if “being laid off” after Xmas is better than “being laid off” before Xmas. Personally I would like to know before the engaging in crazy holiday spending or vacations and having as much notice as possible. Also, what is more important is the severance package as opposed to the date you are notified.


  10. Allana Dion

    Dec 18th, 2007

    Way to take the opportunity to sell yourself Lewis.

    It’s really unfortunate that these people lost their jobs and yes it sucks to have it happen during the holiday season. Unfortunately it’s fairly common to downsize right around this time of year in the corporate world. It’s end of the year planning, setting up for the new year.

    It sucks but it happens often.

  11. Kahni Poitier

    Dec 18th, 2007

    OnRez will fail. In big ways. Putting your eggs into the “help them shop better” basket is going to blow up.

    Almost as badly as the CSI fiasco did.

    I used to like ESC, a long while ago. But the last half of this year has shown me they’ve lost their vision. I liked them because they were creative, not so they could help me spend my money differently.

    Now they’re just marketers, peddling other peoples wares. So sad.

  12. Nina A

    Dec 18th, 2007

    Not the best time of year to fire folks. Companies usually wait until the new year.

  13. Lewis Nerd

    Dec 18th, 2007

    Not “taking an opportunity”, just reminding people of the vast talent that SL holds, outside of the ‘big four’ developers that get more than their fair share of publicity for not always providing a better product at a higher cost than their competition could.

    I wonder what ESC’s “plans for 2008″ are? Clearly much less ambitious than 2007. I wonder if their bubble has finally burst? Perhaps their plans for total domination will turn out to be their downfall?


  14. Prokofy Neva

    Dec 18th, 2007

    I’ve put some comments on Jeremy Vaught’s site — I am puzzled why the direction for development would be to develop an outside shopping site for avatars — which last time I looked was really doing far more poorly than — and not to develop campaigns for real-life companies. Obviously, they have larger budgets — mere rounding errors in their PR account can be a windfall — than avatars making micropayments.

    It’s just odd to be focusing on the *inworld economy* of individuals using SL to do things like buy those everhard genitalia that the Herald is featuring, and not the big island build-outs of the corporations. But…I guess they are leaving Second Life.

    I’ve read Giff’s mumbling PR-speak 3 times, and while I realize it has a lot of cool terms like “virtual space” in it, I still don’t get it.

    What did these 22 people do? Were they mere greeters for $8/hour, the virtual equivalent of the part-time Wal-Mart greeter? That *is* the dirty little secret of virtual world projects: they need Wal-Mart greeters even more than Wal-Mart does!

    Did they code stuff? Build stuff?

    Who survived the cut? Is Cory Edo still there? Barnesworth Anubis? That would let us know whether they are cutting to the bone on content and scripting.

    If you have a staff full of people who can make kickass content in SL, including buildings, avatar skins, etc. how does that transfer to a place like Gaia or There — if at all?

    Also, can we take this article — *finally* a critical article on the Sheep coming from the Herald — to mean that Herald publisher Walker Spaight/Mark Wallace has himself either been laid off, or defunded, or…freed to pursue new challenges, and that ESC no longer sponsors 3pointD or it no longer will be kept current?

  15. Prokofy Neva

    Dec 18th, 2007

    And long-time Herald watchers will note that the Sim Shadow Government always comes out on top. Cassandra Jackson was in the SSG in The Sims Online, and migrated to Second Life, where she has had a successful career making animated food that Sims continue to eat in SL because they were so used to it. Not only does she have milk and cookies for the holidays, she has stuff like Absinthe on a tray with shot glasses. Uri would appreciate.

  16. Amateur Boozehound

    Dec 18th, 2007

    ESC is not a company solely dedicated to Second Life. All companies lay people off.

    If I was part of their planning for 2008 I would say focus more on web-based technologies like the penguin game they sold to Disney and less on the unstable mess that is SL. If you have a load of employees who only know how to develop in SL, that’s really not going to help you when you need someone fluent in JAVA and C++ for your 2008 plans.

    Lewis- Put some of your SL profits into a web redesign fund. If I was a client looking for a developer and you sent me that as your portfolio I’d think you were nuts.

    Check out
    I think last month they had CSS layouts to help designers with no HTML coding knowledge how to make a professional profile. Sorry if that sounded harsh, I am a bit blunt.

  17. DaveOner

    Dec 18th, 2007

    You had me and you lost me, Prok. You should have stuck with the first post. You almost looked sane!

    I ran a security service in Super Mario Brothers 3 for a while but I had to let Luigi go. You guys are taking this WAY too seriously and you’re a fool to rely on money made in SL. It’s still just a game.

  18. DaveOner

    Dec 18th, 2007

    Yeah, Lewis, that page is pretty bad. You should work on it a bit more before showing it to anyone if you want to be taken seriously.

    And I agree with Amateur…any company that is just focusing on SL is painting themselves into a corner as they try to progress.

  19. Lewis Nerd

    Dec 18th, 2007

    I don’t work on “BS focused presentations” like the big name SL companies.

    The kind of clients that I pick up work for are not the kind of clients that ESC are looking to pick up. I also provide a very different service than that of ESC.

    I happen to not think much of ESC’s website either, since comment has been made about my website… but then again, I don’t waste thousands of pounds of my customer’s money on a flashy website.


  20. shwing

    Dec 18th, 2007

    Thankfully there are still plenty of SL development companies – like me, – able to undertake builds for people – Lewis Nerd

    LOL. My god you are absolutely shameless. People just lost their jobs Lewis. Not a good thread to be advertising your own business in. Please put your social filter on and join the rest of us.

  21. DaveOner

    Dec 18th, 2007


    haha you just implied that people that post on SLH have the ability to be socially aware and adjust their statements accordingly!

    I include myself in there btw.

  22. mj

    Dec 18th, 2007

    “Please put your social filter on and join the rest of us.”


    Ok, so Tenshi’s firing had nothing to do with being ‘too controversial’, right?

    Was that just made up for dramatic effect, then? And if so – who made it up? Uri or Tenshi? Or ESC?

  23. Lewis Nerd

    Dec 18th, 2007

    Yes, people lost their jobs… I’ve been in that position several times myself… but one can’t help but think that since the “big companies” don’t care about the rest of us, maybe we need to return the favour occasionally?

    I do find it a little hard to have sympathy for people I don’t know, about a situation that likely doesn’t affect me. Sorry.

  24. Jesus H. Christ

    Dec 18th, 2007

    “Yes, people lost their jobs… I’ve been in that position several times myself… but one can’t help but think that since the “big companies” don’t care about the rest of us, maybe we need to return the favour occasionally?”

    Wow, that’s really Christian of you, Lewis. That’s right off the Sermon on the Mount…treat others like you think they’re treating you. You hypocritical ass. Glad you can tell the difference between a corporation and the people that work for it.


    Dec 19th, 2007

    I do find it a little hard to have sympathy for people I don’t know, about a situation that likely doesn’t affect me. Sorry. –Lewis Nerd

    Lewis I want to grow up to be a Christian JUST LIKE YOU!

  26. Lewis Nerd

    Dec 19th, 2007

    I always find it highly amusing how people throw in the “how christian of you” card when in the very same sentance being completely disregarding to christianity, Mr/Ms/Mrs anonymous poster that can be ignored for trolling?

    Unless you profess to be a christian, you don’t really have the right to denigrate others for not following something that you personally don’t follow or believe in. After all, how can you criticise others for not doing something that you don’t think is right in the first place?

  27. anon

    Dec 19th, 2007

    “After all, how can you criticise others for not doing something that you don’t think is right in the first place?”

    What does it matter? Hypocrisy doesn’t invalidate an argument. If you live by moral code that..I don’t don’t drive cars, and I see you driving around in a car, whether I think your moral code is stupid or not doesn’t suddenly mean you’re not breaking your code.

    It also doesn’t mean you’re not a fucking moron in the first place for whoring yourself out in a situation like this (not that I care about people losing their e-jobs). Though this behavior seems to be common – I remember the “let’s raid John Edwards!” thing prompted someone to advertise how their build is super-secure for only L$blahblah”. Shameless plugs for a community that’s shameless in the first place – who knew?


    Dec 19th, 2007

    Unless you profess to be a christian, you don’t really have the right to denigrate others for not following something that you personally don’t follow or believe in. After all, how can you criticise others for not doing something that you don’t think is right in the first place? –Lewis Nerd

    Either how canst thou say to thy brother, Brother, let me pull out the mote that is in thine eye, when thou thyself beholdest not the beam that is in thine own eye? Thou hypocrite, cast out first the beam out of thine own eye, and then shalt thou see clearly to pull out the mote that is in thy brother’s eye. –Luke 6:42

    Lewis, I’ve been Christian for a long, long time. I’ll pray for you.

  29. Jeremy Vaught

    Dec 19th, 2007

    The people that lost their jobs are not $8.00 an hour employees. I would take an educated guess that the average annual income of the Sheep fired is $55,000. (I made significantly more then this when I worked there) Not a superstar income, but the Sheep pay pretty well for ‘a game’ as some of you have put it. Nobody makes $8.00/hr, even the odd jobbers make $10/hr.

    As far as who is gone. I don’t know the full story. But the events team is gone. This is Torrid Midnight, Jane Calvert, and the like. They are focusing on technology they say, but they let technology people go as well. I’ve heard at least Patrick (formerly of the Ill Clan) and Mark Barrett (formerly of are gone. Both were software developers. Cory is still there, her partner Mak is not. Of the husband and wife duo that made AOL Pointe, Rez and Sonny, Rez is gone, Sonny remains. I know of other creatives that did not survive the cut. (Barnesworth is a contractor btw, no word on contractors)

    As I mentioned in my blog, they continue to support onRez. They also continue to support the MTV project built on Makena ( technology.

    If the average employee that was fired made $50,000 a year, the Sheep just cut over $92,000 a month out of their budget. At the same time they are likely burning bridges with customers as well though. There are unfinished projects, and already overworked employees.

    One of my friends who has been in business a long time took one look at this situation and said, “A fire sale eh?” Meaning doing the firings to set up for a sale. Giff and Valerie (who are both exceedingly smart people) are spin spin spinning this like crazy.

    My final point which I blogged about as well at A large number of people fired were days and weeks away from their first stock vesting. Now they are fired. Now there is more stock for Valerie, Giff, Jonah, Chris, Becky, Morton, and of course Sibley to split up and count their dollars when they sell.

  30. Lewis Nerd

    Dec 19th, 2007

    It’s pointless even trying to discuss anything with someone who doesn’t even have the balls to stand behind their comments with their name.

    Tasteless? Maybe. Bad timing? Perhaps. Watching a ‘competitor’ having problems? Priceless.


  31. urizenus

    Dec 19th, 2007

    The approaching deadline for vesting is particularly interesting if that was a factor. It would certainly provide some incentive for making the move now rather than later. I’m getting the impression though, that this was overdetermined.

  32. DaveOner

    Dec 19th, 2007

    “It’s pointless even trying to discuss anything with someone who doesn’t even have the balls to stand behind their comments with their name.”

    So your last name IRL is “Nerd”? Sounds like a weak attempt at backing out of the conversation that you started with your hypocracy.

    And yeah…it might be a good idea for you to keep the “I’m a Christian” thing to yourself. You’re just making Christians look bad and prepetuating the “opportunist televangelist” stereotype essentially with every comment you’ve left on this article.

    From now on just think to yourself “Where would Jesus advertise?”

  33. Bigger Picture

    Dec 19th, 2007

    Ya’all are missing the bigger picture:

    E-Sheep is owned and run by CBS.

    The main point of this spin-damage-control isn’t just to show e-sheep didn’t totally screw their projections, but to hide the fact that this decision probably came down from on high in CBS and they have no power left. This is probably some fourth-quarter drama at CBS, panicking that AOL and Pontiac – both e-sheep projects – left virtual worlds, that their search was a flop due to public outcry of it being intrusive (not to mention that Linden Lab is implementing their own), and CSI was far less than expected. (CBS should be blamed for this one – the show made SL out to be the stupidest place! No wonder people didn’t log on in droves!)

    Evidence to support that it was CBS, not e-sheep’s decision:
    - They had new full-time people start as little as a month ago.
    - Around the same time they had told employees that job security was good.
    - Just about any investor will tell you straight out that a small company has sold control when they get $8 mil so soon.
    - Sibley is a hippy and hippies don’t lay off people unless they have to.

  34. Maxx Something

    Dec 19th, 2007

    While I think it’s pretty cut throat for the sheep to screw these people a week before Christmas, I have to say this:

    Many of these people, from what I understand, are people who “quit” their day jobs in hopes that virutal jobs would sustain them. If any of the fired, fallen sheep fit this catagory, then their pictures should define the word “Idiot” in websters’ dictionary. I only know of one person who bragged about having quit their dayjob (i think it was thediva rockin) when she got employed be sheep. But if these are the people who were cut, well, stupidty begets stupidity. I saw this coming a mile away…and said long ago that anyone who sacrifices their bread and butter day job in hopes of a big pay off within a game–well, enough said.

  35. Jeremy Vaught

    Dec 19th, 2007

    Working for the Sheep and virtual jobs are two entirely different things. The Electric Sheep Company is a real company, with real income and they pay real salaries. They do still have 52 employees (including TheDiva Rockin) and you can’t support that many people by only getting commission for onRez sales in world.

    It is very much incorrect to say someone is an idiot to have quit their job to work full time for the Sheep. Just because you may go in world to play around, doesn’t mean that is how it is for everyone. When I a Sheep, it was a fantastic place to work. I think Sibley is a fantastic CEO and there are some of the smartest people I know running the company. And it seems that enough of those smart people are going in for the big payoff. And that may not be all the dumb after all. But it is disappointing.

    I also still stand behind my assertion that the primary reason these people were fired was because they were coming up the their first vesting anniversary. I explain it in more detail on my blog. But the dates and the people fired all line up. It is possible the Sheep had plans to trim the fat anyway, and this was the cheapest way to do it. But it definitely played a role.

  36. Maxx Something

    Dec 19th, 2007


    Understood. However, I’m sure that many of these people were lured by the thought of work @ home jobs, where they didn’t have to go into an office (unless it’s a virtual one in SL) and left the stability of their day jobs for something much more volatile.

  37. Morgana Fillion

    Dec 19th, 2007

    Virtual Shmirtual – if ESC is a company that fires nearly 30% of their employees (assuming that the 52 employees you mention are what’s left after the firing of 22 people… closer to 50% if that’s a faulty assumption)as they approach the one year mark is a sign of smart employees.

    Smart – and really unscrupulous – employers, maybe, but not so smart on the employee end. Has nothing to do with whether or not they work in the field of virtual world development or work via telecommuting, though.

  38. anon

    Dec 19th, 2007

    Who would Jesus yiff!?!??!?!?!?

  39. Jeremy Vaught

    Dec 19th, 2007


    Ahh, I see. I was lured away when I went to work for ESC. I was lured away from a boring job in an office. I even took a pay cut to work at the Sheep.

    Was this ridiculous? Not in the least. I knew exactly what I what I was getting myself into. I knew it was a less stable job, in a less stable marketplace. It was a calculated risk. This was pre-funding, but the Sheep were still the biggest company of their kind at the time. I knew a few of the people involved, and I trusted their judgment.

    But I also knew it was just a job. My current company could have laid me off an any time if they felt like it. And they are not virtual. I recognize there is no absolute security anywhere. “But wouldn’t it be a rush to do something that is new and different and break new ground and make the rules up as I go.” And that is what I chose. Risk vs. Stability. I chose risk and I’m so grateful I did. I worked at the Sheep for 4 months, starting in January of 2007. Some of the things I did:

    I worked with some of the most amazing people. People like:
    Cory Edo & Mak
    Johnny Ming
    Giff Constable (can’t remember SL name)
    SnoopyBrown Zamboni
    Christian Westbrook (can’t remember SL name)
    Mark Barrett
    Chosen Few
    Torrid Midnight
    Spider Mandala
    Satchmo Prototype
    Jane Calvert
    Barnesworth Anubis
    Crystal Shard
    There are others that I didn’t work with much at all but learned a great deal from, and others that have been lost to my faulty memory.

    I spent 2 days with the author Dean Koontz at his house where we shared food, wine, laughs, and stories.
    I worked with amazing clients like Matteo from Gabetti. The team at Ogilvy when working on an IBM project. Matt from STA Travel. I began work on I Am Legend working with the film team.
    Gave my input and helped shape numerous other projects.
    Traveled to Washington D.C. for the first time ever.
    Traveled to New York City for the first time ever.(and recognized Rockefeller Center when walking by because I had been there in SL first for the virtual tree lighting)
    Attended the Virtual Worlds Conference and met amazing people.
    Was ‘virtually’ on the Today Show.

    I’m sure I am forgetting more. I would not have done any of these things if I stayed in my non-virtual job and hammered out PHP for a Title Company in Orange County California. If fact, I could still be there doing just that and making more money. But I took a risk. And it paid off big time. I have my experiences. I worked for the Electric Sheep Company. I rode the wave. It was worth my 14+ hour work days. It was worth getting hit up for jobs everywhere I went in SL.

    I totally didn’t expect to write this much. But I just want to make the point that it is volatile, of course. Yeah it is taking a risk. But for me, even four months was worth it. You should never be scared about losing your job. If you are worthy, you will find more great work. If you are a putz, then yeah, stick with the job you hate. :-) I’ll stop now. :)

  40. Stronzo

    Dec 20th, 2007

    I wonder if these layoffs have anything to do with the fact that Second Life sucks?

  41. NinaA

    Dec 20th, 2007


    Good luck!

    “Seize the day, for tomorrow you may die.” :)

  42. Ma

    Dec 21st, 2007

    I don’t know much about ESC, but at least from there website it seems most of their eggs are in the SL basket.

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