Sonos lays off 200 employees amid ongoing troubles

Sonos, which pioneered affordable home speaker systems, announced this week it is cutting 200 jobs in an attempt to restructure following mismanagement and financial losses that have roiled the Santa Barbara company.

The layoffs, which represent about 12% of Sonos’ workforce, come after months of trouble, including a disastrous relaunch of the company’s app last year that left customers leery and led to Chief Executive Patrick Spence’s exit last month.

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“There’s no way around the fact that this is a terrible outcome,” interim CEO Tom Conrad, who was a long-standing board member, said in a statement on the company’s website.

Sonos will restructure into smaller teams based on function — hardware, software, design, quality and operations — instead of around the various products it sells to help in decision-making and collaboration, according to the announcement.

“Being smaller and more focused will require us to do a much better job of prioritizing our work — lately we’ve let too many projects run under a cloud of half-commitment. We’re going to fix this too,” Conrad wrote.

The company’s troubles were spurred in large part by the release in May of a new Sonos controller app that was nearly unusable, customers said.

The speaker manufacturer said it would spend $20 million to $30 million to get the app rolling again and provide better customer service, but took a major hit to revenue in the fiscal year that ended on Sept. 30 despite releasing new products.

In an earnings report released Thursday morning, Sonos said revenue in the last three months of 2024 decreased about 10% from the same period in 2023 to roughly $551,000. Operating income dropped almost 40% in the same period.

Shares of the company’s stock were trading at about $15 late Thursday afternoon — an increase of more than 6% for the day, but down nearly 8% over the last 12 months.

News of cuts at Sonos came on the same day that Workday, a human resources management software company also based in California, announced it would cull about 8.5% of its workforce, or about 1,750 jobs. Workday plans to refocus on artificial intelligence and platform development in the new fiscal year, CEO Carl Eschenbach said in a memo sent to employees Wednesday morning.