Sonos laying off 7 percent of its workforce as it faces a cooling demand for its speakers. The company also plans to reduce its real estate footprint and re-evaluate certain program spend as part of its cost-saving measures. Sonos had around 1,844 employees as of October last year, indicating that at least 130 positions will be affected by the layoffs.
Sonos CEO Patrick Spence acknowledged the need to adapt and protect profitability in the face of challenging market conditions. He mentioned that while the company remains committed to its product roadmap for future growth, difficult decisions had to be made, including job cuts and re-evaluating expenditures.
This marks the first significant round of layoffs for Sonos since mid-2020 when the company reduced its workforce by 12 percent due to the impact of the COVID-19 pandemic. During that time, Sonos also closed its New York City retail store and implemented pay cuts for several executives.
The restructuring is expected to result in charges of approximately $11 to $14 million, with the majority related to severance and benefits costs for employees. Sonos, which operates offices in various locations globally, has been increasingly supportive of remote work and may consider closing some physical spaces.
The decision to downsize comes as Sonos experiences a slowdown in consumer demand for its speakers and home theater products. The company recently lowered its annual revenue forecast and reported a significant year-over-year drop in revenue. However, Sonos received a positive outcome in a patent infringement lawsuit against Google, securing a $32.5 million judgment.
While grappling with the challenging market conditions, Sonos continues to innovate. It recently released the Era 100 smart speaker and Era 300 with spatial audio capabilities, and is expected to launch a second-generation Sonos Move speaker in the near future, as indicated by its recent FCC filing.
