By Sabela Ojea

Sonos said it is reducing the total size of its workforce by around 12% to cut costs, shortly after Tom Conrad took over as interim chief executive of the troubled maker of premium wireless speakers and other audio products.

The Santa Barbara, Ca., company on Wednesday said it expects to book restructuring charges of $15 million to $18 million as it reorganizes its operations into flatter, smaller and more focused teams to improve its core experience and deliver new products.

"One thing I've observed firsthand is that we've become mired in too many layers that have made collaboration and decision-making harder than it needs to be," Conrad said in a letter sent to employees.

As of Sept. 28, Sonos had 1,708 full-time employees. The company expects to incur most of the restructuring expenses in its fiscal second-quarter earnings.

Overall, Sonos is moving away from business units for individual product categories and reorganizing its product forces into functional groups for hardware, software, design, quality and operations, Conrad said.

"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," the executive said. "We're going to fix this too."

Trouble at Sonos began brewing after the company last May issued an overhaul to its app that left many customers unable to connect or use their speakers. In August, the company slashed its financial forecast for the fiscal year and put a hold on new product launches as it addressed issues with the app update. Later that month Sonos said it would lay off 6% of its workforce and reduce its real-estate footprint.

The challenges continued as fourth-quarter results in November revealed double-digit-percentage declines in revenue and unit sales. Sonos's guidance for the first quarter indicated revenue would be down year-over-year. The company is expected to post results on Thursday.

Write to Sabela Ojea at sabela.ojea@wsj.com

(END) Dow Jones Newswires

February 05, 2025 17:03 ET (22:03 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.