Sonos says it is cutting 12% of global employees due to Covid-19

Sonos celebrates its IPO on the Nasdaq on August 2, 2018.

Source: Nasdaq

Speaker maker Sonos plans to cut 12% of its global workforce due to “the uncertainty and challenges stemming from the Covid-19 pandemic,” the company announced in a presentation Tuesday. It is also closing its New York City retail store and six satellite offices.

The Santa Barbara-based company said in a May letter to shareholders that it began a review of planned investments and implemented initial actions in March to reduce operating expenses and preserve liquidity. Those actions included cutting marketing investments, managing and “adjusting” inventory, and eliminating some discretionary operating expenses, he said.

The company’s shares rose more than 1% on Wednesday morning. It was not immediately clear how many employees the company currently has, but the company’s investor relations website says it has 1,450 employees.

Company CEO Patrick Spence said in an emailed statement that the pandemic and the resulting economic impacts resulted in the company having to “make some difficult decisions.”

These changes are necessary so that we can get out of this period ready to take advantage of the opportunities we see in the future, “the statement reads, in part.” Yesterday we organized a series of global hands-on meetings so that our team knows that we have to say goodbye to approximately 12% of our people … Supporting them through this transition is our number one priority, and we have focused on separation, equity, health care and career transition training to help find what comes next. “

The filing adds that the company will provide more details on its business and cost savings resulting from the initiatives when it reports its fiscal results for the third quarter of 2020. Sonos estimates that site terminations and closings will cost an estimated $ 25 million to $ $ 30 million in “restructuring and related impairment charges,” most of which it expects to incur in its fiscal third quarter.

On Tuesday, the company’s board of directors also approved a 20% reduction in the base salary of the company’s CEO between July 1 and December 31, and for other executive officers between July 1 and 30 September of this year. All board members will also waive their annual cash hold between July 1 and December 31.

Correction: This story was updated to reflect that Sonos submitted its layoff notice on Tuesday.