Sonos, the popular wireless speaker company, has announced that it will be letting go of approximately 130 employees, or 7% of its workforce. In a recent filing, Sonos CEO Patrick Spence stated that the layoffs were necessary in order to overcome ongoing challenges and reevaluate the company’s program spend.
As of October 2022, Sonos employed 1,844 people, but with this latest round of layoffs, that number will decrease. The restructuring is expected to cost the company between $11 million and $14 million, which includes not only the cost of severance, but also expenses related to a strategic real estate portfolio streamlining.
The company’s most recent earnings report, covering the period ending on April 1st, 2023, showed a decline in both gross profit and revenue compared to the same period the year before. Quarterly gross profit dropped from $179 million to $131 million, while revenue was down by 23.9% year-over-year, totaling $304.2 million. These factors may have contributed to the decision to downsize the workforce.
This is not the first time that Sonos has had to make cuts in response to external circumstances. In 2020, the company reduced its headcount by 12% due to the COVID-19 pandemic.
Despite the news of layoffs, Sonos’ shares have remained relatively flat in premarket trading. The company’s leadership is hopeful that these tough choices will ultimately lead to improved financial stability and growth in the coming years.
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