Last Updated on December 27, 2019 by Danielle
Sphero announces layoffs and a change in focus to education.
With a solid lineup of licensed toys in its product portfolio from Star Wars to Cars 3 to Spider-Man, Sphero was expecting solid performance last year. It had R2-D2, BB-8, BB-9E, and a talking Spider-Man and Cars vehicle. And most probably wouldn’t argue with that. However, things didn’t turn out as expected, so Sphero recently announced layoffs, laying off forty-five members of its staff. Most of the layoffs took place in Colorado, Sphero’s home, while there were also layoffs in Hong Kong and the United Kingdom as well.
Sphero made a statement on the recent layoffs: “We restructured our team to better align with our product needs.” Ultimately, it represents a change in strategy going forward.
In addition to the layoff announcement, Sphero also announced that it is restructuring its business to focus on education. According to Sphero, its holiday sales weren’t exactly terrible, but they were not “exactly what had expected.”
So why the sudden change in focus to education? The education segment continues to shine for Sphero so this partly explains its decision. The shift to education will also allow Sphero to leverage its strengths. Sphero believes it can deliver the best products when it takes complete ownership of the entire process from inception to market. According to a company spokesperson, “education is something we can actually own.” Further, this shift in focus will allow the company to better focus on its vision. So, all things considered, it makes sense for Sphero to invest more on the education side of its business. But it’s also worth noting STEM educational robots is a hyper-competitive segment.
Sphero hasn’t commented on how much this restructuring effort will actually affect future toys. And there were no specific details as to whether it would sever lucrative ties to companies like Disney.
It goes to show you that just because you have some of the biggest toy licenses behind you, it doesn’t automatically guarantee success, as was pointed out in our special feature: Star Wars Toy Sales Surprisingly Decline – Does This Spell Doom For Movie Tie-Ins? Innovation and strong characters that people are genuinely interested in are equally important factors to have a successful toy. It appears that Sphero is now taking a safer route to minimize risk and stabilize its business while positioning itself to better deliver on its vision and ultimately deliver great products for its consumers. What do you think about Sphero’s restructuring to focus on education? Let us know in the comments below. We’d love to hear your thoughts.