Sonos is laying off about 100 people, the company confirmed on Wednesday. The news comes as Sonos is expecting to spend $20 million to $30 million in the short term to repair the damage from its poorly received app update.
In a statement to The Verge, Sonos CEO Patrick Spence said:
We made the difficult decision to say goodbye to approximately 100 team members representing 6 percent of the company. This action was a difficult, but necessary, measure to ensure continued, meaningful investment in Sonos’ product roadmap while setting Sonos up for long term success.
Sonos reported having 1,844 people in October 2022, per CNBC. The company also announced layoffs of about 130 people (or 7 percent of its workforce) in June 2023 due to “continued headwinds,” according to Spence. In 2020, Sonos laid off 12 percent of its employees, which was estimated to be about 174 people.
App woes
This most recent layoff wave comes as Sonos is expected to spend tens of millions of dollars to address the fallout from its updated app. Released in May, the update removed various functions, including the ability to use sleep timers and access local music libraries and accessibility features. By July, Spence was apologizing for the app and promising that it would be fixed with biweekly updates through the fall. Last week, Sonos revealed the high price of addressing the negative feedback, which includes expenses for updating the app, increasing customer support, and trying to win back customer and partner trust with things like discounts.
Sonos is also expecting less revenue in its fiscal Q4 2024 because it’s delaying two hardware product launches until the app fixes are done. Sonos hasn’t confirmed this, but one of the products was expected to be a Sonos Arc soundbar follow-up. Citing anonymous sources, The Verge said on Wednesday that Sonos may release the soundbar in October (which is in Sonos' fiscal year 2025).
In his statement regarding the layoffs, Spence said that Sonos’ “continued commitment to the app recovery and delighting our customers remains our priority, and we are confident that today’s actions will not impact our ability to deliver on that promise.”
Sonos may just relaunch its old app, The Verge reported on Wednesday. The publication said “there have been discussions high up within Sonos about bringing back the prior version of the app.”
It’s unclear if Sonos would make both versions of the app available or pull back the new version until it's fixed enough to satisfy customers’ demands. We’ve reached out to Sonos for comment.
Even if Sonos quickly brings back the old app, the botched app redesign is expected to impact the company's finances for months, if not longer. Sonos executives have admitted that the app was rolled out with bugs that testing missed. The update, which Sonos said was a huge overhaul that included redesigning the cloud infrastructure and player side of the system, was also rushed out ahead of Sonos' Ace headphones release in June, Bloomberg reported. With Sonos now dealing with long-term customers whose devices suddenly stopped working as expected and months of customers relying on an unsatisfactory app, the consequences of pushing the update out before it was ready go beyond dollars and cents.
