Sonos lays off 100 people over costly app issues

Sonos announced Wednesday that it will lay off about 100 people and plans to spend $20 million to $30 million in the short term to repair the damage caused by its poorly received app update.

In a statement to The Verge, Sonos CEO Patrick Spence said:

We have made the difficult decision to say goodbye to approximately 100 team members, or 6% of the company. This decision was difficult, but necessary to ensure continued and meaningful investment in Sonos’ product roadmap, while setting Sonos up for long-term success.

According to CNBC, Sonos had 1,844 employees as of October 2022. The company also announced that it would lay off about 130 people (or 7% of its workforce) in June 2023 due to “continued headwinds,” according to Spence. In 2020, Sonos laid off 12% of its employees, or about 174 people.

Application issues

The latest round of layoffs comes as Sonos is expected to spend tens of millions of dollars to address the fallout from its app update. Released in May, the update removed several features, including the ability to use sleep timers and access local music libraries and accessibility features. In July, Spence apologized for the app and promised that the problem would be fixed with bimonthly updates through the fall. Last week, Sonos revealed the steep price it has paid to address negative feedback, which includes spending money on updating the app, improving customer support and trying to regain the trust of customers and partners with things like discounts.

Sonos also expects revenue to decline in its fiscal fourth quarter of 2024 as it delays the launch of two hardware products until app fixes are complete. Sonos hasn’t confirmed this, but one of the products was expected to be a sequel to the Sonos Arc soundbar. Citing unnamed sources, The Verge reported Wednesday that Sonos could release the soundbar in October (which would be during Sonos’ fiscal 2025).

In his statement regarding the layoffs, Spence said that “Sonos’ ongoing commitment to app recovery and customer satisfaction remains our top priority, and we are confident that today’s actions will not impact our ability to deliver on that promise.”

Sonos may be relaunching its old app, The Verge reported Wednesday. The publication said that “there have been discussions within Sonos to bring back the previous version of the app.”

It’s unclear whether Sonos will make both versions of the app available or pull the new version until it’s fixed enough to satisfy customer requests. We’ve reached out to Sonos for comment.

Even if Sonos quickly gets the old app back up and running, the botched app overhaul is likely 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 didn’t catch. The update, which Sonos said was a major overhaul that included reworking the cloud infrastructure and the player side of the system, was also rushed out ahead of the release of Sonos’ Ace headphones in June, Bloomberg reported. Sonos is now dealing with longtime customers whose devices suddenly stopped working as expected and customers who have been relying on an unsatisfactory app for months. The consequences of updating before it was ready go beyond dollars and cents.