Sonos To Shutter Flagship Store, Lay Off 12 Percent Of Workforce

Words by Retail Bum

Sonos To Shutter Flagship Store, Lay Off 12 Percent Of Workforce
Sonos To Shutter Flagship Store, Lay Off 12 Percent Of Workforce

Smart speaker manufacturer Sonos announced plans to lay off 12 percent of its workforce and shutter its flagship store in SoHo, New York, as it seeks to gain more “operational flexibility.” 

In addition, the company plans to close its six satellite offices and reduce the compensation of its CEO, Patrick Spence, by 20 percent for the remainder of the year. The company’s board also approved a 20 percent base salary reduction for other executive officers starting from July 1 till the end of September this year, according to the company’s filing. Other members of the board, meanwhile, also agreed to give up their cash retainer for the rest of the year, the Market Watch reported

The announcement comes as the company continues to struggle with sales during the pandemic. Even before the pandemic, however, Sonos faced stiff competition from tech giants such as Apple, Amazon and Google — all of which sell their own range of smart speakers, making it harder for the company to differentiate itself. The company has also been engaged in a legal battle with Google over patent infringement, alleging that the tech giant blatantly and knowingly copied its patent technology for its smart speakers. 

Earlier this week, the company’s stock value climbed up by 9 percent on Monday this week after Citron Research presented a bullish view of the company’s growth prospects. With more consumers staying at home and a higher share of Sonos users buying more devices to add to their home ecosystem, the company is “set to report a blowout quarter,” the analysts argued, betting on the stickiness of Sonos’ ecosystem. According to the company’s S-1 filing from 2018, some 6.9 million households owned a Sonos speaker and over half of them owned a single device, whereas a quarter owned more than three.

After the announcement on Wednesday, the company’s stock value was down by 2.34 percent and closed at $13.77.

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