Apple HomePod competitor Sonos lays off 96 employees ahead of expected IPO
Wireless speaker manufacturer Sonos on Thursday revealed plans to cut 96 employees from its workforce in a bid to boost profitability, a move that comes just ahead of an expected initial public offering said to be valued in the billions.
The eliminations whittle down Sonos' workforce of approximately 1,500 employees by some six percent and will impact multiple departments within the company, Bloomberg reports.
"Like any healthy business, we occasionally make adjustments to the size and structure of our teams to stay nimble and align resources with market opportunities," Sonos said in a prepared statement. "Sonos is growing and profitable."
Details of the job cuts or the planned reorganization's timeline were not made available to press.
Word of the eliminations arrives on the eve of an anticipated IPO that, according to The Wall Street Journal, could come as soon as June or July.
In April, it was reported that the company confidentially filed for an IPO with the Securities and Exchange Commission and held an analyst meeting at its offices in Santa Barbara, Calif. Citing people familiar with the matter, the WSJ said Sonos is targeting a market value of $2.5 billion to $3 billion, a sum that would result in a capital infusion of several hundred millions of dollars.
Sonos, a leader in the connected home speaker market, is facing increased competition from smart speaker makers like Amazon, Google and, most recently, Apple. When former CEO and company founder John MacFarlane resigned early last year, he admitted to turning a deaf ear to the threat the up and coming technology might pose to his company.
Speaking specifically about Amazon's Echo, which enjoys a commanding lead in the smart speaker space, MacFarlane said he was dismissive of the device's intrinsic benefits. Unlike Sonos' more traditional app-based streaming setup, smart speakers feature native audio playback controlled by a user's voice.
"I fell into that trap where I've been watching voice recognition for years," he said at the time. "I tried Echo in the beginning and wrote it off. I had too many distractions at that time. I wasn't playing at the level I should have been playing at in all frankness."
Sonos released its first smart speaker, the Sonos One, in December with support for Amazon's Alexa voice assistant. With premium internals — and a premium price tag of $199 — the speaker is often compared to Apple's HomePod, a $349 device loaded with advanced audio technology and Siri smarts.
It seems Sonos' efforts to break into the space have yet to be rewarded, as fresh statistics from market research firm Strategy Analytics show the company failed to end the first quarter as a top-five smart speaker vendor. As expected, Amazon led the pack with 4 million Echo units shipped, followed by Google and Alibaba. Apple placed fourth with around 600,000 HomePods sold, a respectable feat considering the device went up for sale in February.
Today's announced job cuts follow a round of layoffs performed two years ago. At the time, Sonos said it would shift focus toward streaming music services and voice control systems.