The situation at Sonos will likely get much worse before the audio manufacturing firm starts to exhibit signs of improvement. With analysts projecting that the company’s revenue will decline by 15 percent during the holiday quarter, interim CEO Tim Conrad had to make some tough decisions, starting with some layoffs. According to the Chief Executive’s latest announcement, the company will have 200 fewer employees as he believes that the only way forward is for teams to get smaller and more focused.
Those included in the layoffs list will receive severance pay based on the time they have been employed at Sonos
What started off as an app redesign quickly turned into a hot mess as incompatibility, performance, and other issues started plaguing Sonos’ software, backfiring what the company initially believed to be a step in the right direction. The situation escalated to the point where the previous Chief Executive, Patrick Spence, was forced to step down after eight years of being in that position due to the disastrous update, which is an event that also negatively impacted Sonos’ financial quarter. Now, according to the latest announcement posted by Tim Conrad, the only way to make things right is with a smaller headcount, as smaller teams can be more focused.
“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. 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. 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.”
As for those who will no longer be employed at Sonos, the announcement mentions that the affected personnel will be given severance pay based on the time they have spent with the company. The exact monetary value was not mentioned, but employees on the firm’s quarterly bonus plan will be eligible to receive a Q1 bonus. The workforce stationed in the U.S. will also receive health care coverage.
In addition to trimming the workforce, Sonos is also developing a premium streaming box codenamed ‘Pinewood’ that is reportedly running Android and will ship with a host of features designed to elevate the audio experience. The company is entering a fresh category and will effectively take on the Apple TV 4K, but it could be an expensive undertaking as a previous report mentions a price range of $200 to $400.
News Source: Sonos
