Sonos CEO Patrick Spence is resigning from the company today, effective immediately, and board member Tom Conrad is assuming the role of interim CEO. It’s the most dramatic development in an eight-month saga that has proven to be the most difficult period in Sonos’ history.
The company’s decision to prematurely release a buggy, completely overhauled new app in May — with crucial features missing at launch — outraged customers and set off a months-long domino effect that included layoffs, a steep decline employee morale and public apologies. tour. The Sonos Ace headphones, which were rumored to be behind the app’s rushed launch, were immediately overshadowed by controversy, and my sources tell me that sales numbers remain dismal. Sonos’ community forums and subreddit have been dominated by complaints and overwhelmingly negative sentiment since spring.
In October, Sonos attempted to control the situation, which had by then escalated into a public relations disaster, by outlining a recovery plan. The company pledged to strengthen product development principles, increase transparency internally and take other steps it said would prevent a mistake of this magnitude from happening again. I can also report for the first time that Sonos has hired a crisis management PR firm to help it through this ordeal.
But three months later, the Sonos board and Spence concluded that these measures were not enough: the app debacle officially cost Spence his job. However, no further changes are being made today. So for now, product director Maxime Bouvat-Merlin, who some employees have told me privately deserves some responsibility for recent missteps, will remain in his role.
“We will launch a search for the next CEO and will work to find a leader who will continue to build on our legacy and work with the team to move the company forward,” the Sonos spokeswoman told me, Erin Pategas. by phone Sunday afternoon. She described change in direction as “turning a page in the chapter we are in and charting a path that takes us in the direction we want to go for ourselves and for our clients.”
In case you are wondering, this direction will be not include a return to the old Sonos app; Pategas said the company remains fully committed to the new software, which has received numerous bug fixes and has gradually added previous features over the past few months. The situation has improved, but even at this point there are still complaints about the app’s speakers randomly disappearing and other issues.
Patrick Spence joined Sonos in 2012 as Chief Commercial Officer. As CEO, he oversaw a wide range of successful hardware products; Sonos has launched several impressive soundbars (including the all-new Arc Ultra), integrated portable audio with Move and Roam, and launched the futuristic Era 300 spatial audio speaker. But the app stumbles – and the Spence’s failure to apologize immediately afterwards – ultimately tarnished his reputation with the company’s most loyal customers. There was no way to overcome this.
Spence will technically stay with Sonos until June 30 of this year, during which time he will receive a base salary of $7,500 per month for providing the company with “strategic consulting services.” And when that end date arrives, he will receive a severance package of $1,875,000. These numbers come from an 8K filing Sonos filed with the SEC regarding today’s news.
It’s now up to Tom Conrad, who joined the Sonos board in 2017, to rally disenchanted employees and successfully regain consumer trust. Conrad’s career includes a 10-year stint as chief technology officer at Pandora and two years as vice president of product at Snapchat. He worked on Apple’s Finder software in the ’90s. Most recently, Conrad served as chief product officer for the ill-fated streaming service Quibi. Pategas believes he is ideally suited for the role of interim CEO as he is keenly aware of the company’s current predicament; Conrad and Nick Millington, chief innovation officer, have already been leading Sonos’ efforts to fix the app for months.
Despite this seismic shift at the top, Sonos’ future product portfolio remains “full steam ahead,” Pategas told me. The company’s next major new product is rumored to be a streaming video player, which would pit it against Apple, Roku, Amazon and Google in the living room.