Sonos, the audio technology company known for its elegant, compact speakers, has laid off approximately 200 people, the company announced on Wednesday (Feb. 5).
The restructuring follows the layoffs of 100 employees — about 6% of Sonos’ workforce at the time — in August 2024 after a disastrous rollout of a new smartphone app forced the company to lower sales projections and delay product launches. In the wake of the problems, CEO Patrick Spence resigned in January and was replaced by interim CEO Tom Conrad, Pandora’s chief technology officer during the groundbreaking internet radio service’s early years.
In a letter to employees posted on the Sonos website, Conrad explained that the company needed to reshape its organizational structure to become more efficient. “One thing I’ve observed first hand is that we’ve become mired in too many layers that have made collaboration and decision-making harder than it needs to be,” Conrad wrote. “So across the company today we are reorganizing into flatter, smaller, and more focused teams.
“Most significantly, we are reorganizing our Product organization into functional groups for Hardware, Software, Design, Quality and Operations, and away from dedicated business units devoted to individual product categories,” he continued. “With this simpler organization in place, cross-functional project teams will come together to improve our core experience and deliver new products. 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.”
The company’s woes are evident in its financial statements. In fiscal year 2024 (ended Sept. 30, 2024), Sonos’ revenue dropped 8.3% from the prior year and came in 13.4% below fiscal 2022’s revenue. Over that time span, a $67.4 million net profit turned into a $38.1 million net loss despite Sonos reaching a high of 3.08 products per household, up from 3.05 in fiscal 2023, and being in 16.3 million homes. In addition to music-focused speakers, Sonos also sells “soundbar” speakers for TVs and in May 2024 launched a luxury headphone, Sonos Ace.
With news of the layoffs hitting after markets closed on Wednesday, Sonos shares fell 2.2%, to $13.95, in after-hours trading. The stock is well below its 52-week high of $19.76 set in March 2024 but has reclaimed some losses after falling to a low of $10.23 in August. Sonos hit an all-time high of $44.72 on April 14, 2021.
