Sonos reduces staff by 7 percent
Sonos, the popular smart speaker brand, has announced that it will be reducing its workforce by 7%, which equates to approximately 130 jobs. The company has also stated that it will be reevaluating its spending on certain programs and reducing its “real estate footprint.” The cost of these changes is estimated to be between $11 million and $14 million, with up to $11 million being allocated to severance and benefits. Sonos is the latest major tech company to implement staff layoffs.
In a statement to ReturnByte, Sonos CEO Patrick Spence says his company was already planning to “protect profitability” if performance fell short of expectations. The layoffs and cost changes are the result of “continuous headwinds,” the CEO adds.
Sonos has been struggling financially in recent months. It has swung between narrow profits and losses for several quarters, losing $30.7 million in the second quarter of 2023, compared with a profit of $8.6 million a year earlier. Spence blamed the shortfall on “softening” demand and tightening store inventories, promising “quick action” to cut costs. It’s not clear how much of a role the rough economy played in the sales decline, but it wouldn’t have helped.
This is the first major round of layoffs at Sonos since 2020, when the company cut 12 percent of its staff due to the difficulties of the COVID-19 pandemic. They also come at a critical moment. Sonos just introduced its most important speakers in years, the Era 100 and the surround sound-focused Era 300, and is still fighting with Google over patent royalties. It also faces new competition, which includes the second-generation Apple HomePod. The market is evolving, and Sonos is under pressure to keep up.
