Sonos
Sonos is laying off around 100 employees, the company confirmed Wednesday. The news comes as Sonos expects to spend $20 million to $30 million in the short term to repair the damage caused by the poorly received app update.
In a statement to The Verge, Sonos CEO Patrick Spence said:
We have made the difficult decision to say goodbye to approximately 100 team members, representing 6 percent of the company. This action was difficult but necessary to ensure continued meaningful investment in Sonos’ product roadmap while positioning Sonos for long-term success.
According to CNBC, Sonos employed 1,844 people as of October 2022. According to Spence, the company also announced in June 2023 that it would lay off about 130 employees (or 7 percent of its workforce) due to “ongoing headwinds.” In 2020, Sonos laid off 12 percent of its workforce, which is estimated to be about 174 people.
App problems
This latest wave of layoffs comes as Sonos is expected to spend tens of millions of dollars to fix the fallout from its updated app. The update, released in May, removed several features, including the ability to use sleep timers and access local music libraries and accessibility features. In July, Spence apologized for the app and promised it would be fixed by the fall with biweekly updates. Last week, Sonos said it’s paying a high price to fix the negative feedback, including spending to update the app, improve customer support and try to win back the trust of customers and partners through things like discounts.
Sonos also expects lower revenue in the fourth quarter of fiscal 2024 as it delays the launch of two hardware products until app fixes are complete. Sonos has not confirmed this, but one of the products should be a successor to the Sonos Arc soundbar. Citing anonymous sources, The Verge said on Wednesday that Sonos may launch the soundbar in October (so fiscal 2025).
In his statement on the layoffs, Spence said Sonos’ “ongoing commitment to restoring the app and keeping our customers happy remains our priority, and we are confident that today’s actions will not impact our ability to deliver on that promise.”
Sonos may relaunch its old app, The Verge reported on Wednesday. The publication said “there have been high-level discussions at Sonos about bringing back the previous version of the app.”
It’s unclear if Sonos will make both versions of the app available or pull the new version until it’s fixed enough to meet customer needs. We’ve reached out to Sonos for comment.
Even if Sonos brings back the old app quickly, the botched app redesign is expected to drain the company’s finances for months, if not longer. Sonos executives have admitted that the app was rolled out with bugs that weren’t caught in testing. The update, which Sonos said was a major overhaul that also included redesigning the cloud infrastructure and the player side of the system, was also rushed out before the release of the Sonos Ace headphones in June, Bloomberg reported. With Sonos now dealing with longtime customers whose devices suddenly stopped working as expected and customers stuck with an unsatisfactory app for months, the consequences of releasing the update before it was ready go beyond dollars and cents.
