Seems Second Life-focused Electric Sheep, developers of the OnRez browser for Second Life and world-builders for the likes of Warner Brothers and CSI: NY, has laid off a third of its employees, or 22 people.

TechCrunch credits disappointing performance for the CSI:NY/Second Life crossover -- not that it was an outright failure, but that it didn't garner what the article calls a "ridiculously high number" of expected signups. It also highlights the recent loss of two of the company's weightier clients, AOL and Pontiac, who've departed Second Life.

There's not enough info to tell if Electric Sheep are here a victim of the widely-perceived Second Life entropy, or if they simply raised expectations for growth too high, too fast. The layoffs come just in time for Christmas, too -- hang in there, guys.

[Via TechCrunch]