Sonos Announces Layoffs and Real Estate Reduction in the Wake of Challenging Economic Conditions
Key Highlights :
High-tech speaker and audio technology major Sonos has announced to lay off seven per cent of its workforce, which is roughly 130 employees in the wake of challenging economic conditions, the company said in a filing with the US Securities and Exchange Commission (SEC). The audio giant also said that it will reduce its real estate footprint in the coming months and re-evaluate certain programme expenditures, the media has reported.
Sonos has stated that it will incur about $11-$14 million of restructuring and related charges, of which $9-$11 million is related to employee severance and benefits costs. As of October 2022, the company employed 1,844 people, says a report by CNBC. "Decisions regarding the elimination of positions are subject to local law and consultation requirements in certain countries. The company also committed to further reducing its real estate footprint and re-evaluating certain programme spend," Sonos said in a filing with the US Securities and Exchange Commission (SEC) on Wednesday.
The firm also expects to incur substantially all of the restructuring and related charges in the third quarter of fiscal 2023. In 2020, the company had reduced its headcount by 12 per cent in response to the rapidly spreading Coronavirus pandemic. “We have acknowledged that if we started to deviate from our performance expectations, we would take action to adapt and protect profitability while still investing in our exciting product roadmap to drive future growth,” Sonos CEO Patrick Spence said in a statement, as reported by The Verge.
The decision to lay off employees and reduce its real estate footprint is the latest in a series of cost-cutting measures taken by the company in recent months. The company has also re-evaluated certain programme expenditures and is looking to reduce costs in order to stay competitive in the market.
In addition to the layoffs and real estate reduction, Sonos has also been involved in a legal battle with Google. A court in the US has ordered Google to pay $32.5 million to Sonos, for infringing on the company's smart speaker patent. The verdict by a San Francisco jury found that Google's smart speakers and media players infringed on one of two Sonos patents, reports The Verge, citing the court filing. Jurors said that Google should pay $2.30 for each of the more than 14 million devices sold.
The cost-cutting measures and legal battle are indicative of the challenges that the company is facing in the current economic environment. Despite the challenges, Sonos remains committed to investing in its product roadmap in order to drive future growth. The company is also looking to reduce costs and maximize efficiency in order to remain competitive in the market.
