Sonos Layoff 7% of Its Workforce as Tech Sector Misery Continues
Key takeaways
- Sonos is laying off around 130 employees after weak sales and a downbeat revenue forecast for the year
- Sonos share were down 1% in pre-trading though have recovered to 0.3% up
- Embracer Group, SoftBank and Reed Smith all recently announced layoffs in continuing woe for workers
Audio and speaker producer Sonos is the latest to announce job cuts as inflation, higher interest rates and a drop in consumer spending impact businesses. 130 roles are said to be affected, with the company already on thin ice with investors thanks to a weak earnings report last month. Here’s the lowdown.
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What has Sonos announced?
Audio company Sonos, which is famous for its speakers, has confirmed it’s laying off 7% of its workforce, or around 130 employees. In the filing, Sonos said it was “also committed to further reducing its real estate footprint and re-evaluating certain program spend”.
The last time Sonos cut employees was in 2020, when it saw 12% of staff let go, its New York store closed and executives had their pay cut. Today Sonos has ten locations, including Santa Barbara, Seattle and San Francisco — all of which could shut their doors.
Sonos hasn’t had a good time of things lately, having lowered its annual revenue forecast and reporting a year-on-year revenue decrease of 24%. At the news of the layoffs, Sonos shares were down 1% in pre-trading, though they have recovered throughout the day to stand at 0.34% up.
Are other companies making layoffs?
Sadly, the economic malaise has spread past the tech market and also affects other sectors. In the gaming world, Embracer Group has announced a huge restructuring effort, including layoffs, game cancellations and studio closures. It’s not known yet how many jobs will be impacted.
Japanese conglomerate SoftBank is said to be preparing for a second round of job cuts, which could impact up to 30% of its global workforce, including in the U.S. It already eliminated 150 roles back in September last year.
Cost-cutting measures have even hit the legal sector, with law firm Reed Smith reducing its workforce by less than 2%. The move is said to affect 20 business service staff and 30 lawyers. Law firm Orricks made a similar move, laying off 90 employees or 6% of its global workforce.
The bottom line
Sonos is in troubled waters right now — and the stock price reaction shows investors don’t have much confidence in the audio company’s financial situation. While high interest rates push businesses to the brink and high inflation throttles consumer spending, it won’t be the last company we hear of making layoffs.
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