Web-based toy maker Smith & Tinker lays off 30 percent of staff

Smith & Tinker had a high-profile launch of its Nanovor toy and accompanying game web site this fall. It was billed as a marriage of toys and online games.

But yesterday the company laid off about 30 percent of its staff, which may be about 15 of its 50 or so employees, VentureBeat has learned. The company confirmed it had layoffs this week, but it didn’t say exactly how many.

In a statement, the company said, “As many startups do, we staffed aggressively early on to meet deadlines for launching our product online and at retail this year. These layoffs are needed to bring our organization to a healthy operational size for the remainder of this year and 2010. Nanovor has been recognized by FunFare and Dr. Toy as a hot toy for 2009 and has seen strong consumer adoption to date; the company continues to receive solid support from our board. Employees leaving the company will receive severance packages.”

It may or may not say something about how well sales are going for Nanovor. The product consists of $49 Nanoscopes, which are used for creature fights when friends are together, as well as a dedicated game web site where players can log in, customize their creatures, and then fight battles with other players.

Smith & Tinker is the brainchild of Jordan Weisman, a veteran toy and game developer who was behind the creation of franchises such as MechWarrior and BattleTech. The company announced in August that it had raised $29 million in a second round of venture capital from Alsop Louie Partners, DCM, Foundry Group, Leo Capital Holdings and billionaire Paul Allen’s Vulcan Capital.