Updated: Sonos says the layoffs were not ‘major’ or ‘significant’ as previously reported, though the company is declining to offer concrete numbers. Specific layoff figures have not yet been published.
A recent study revealed that 55 percent of Americans typically listen to music through their laptop speakers. That raises serious questions over the future sophisticated, next-generation stereo systems, a category led by Santa Barbara-based Sonos.
Early this morning, Sonos revealed an unspecified number of layoffs, with the heavily funded company re-steering the ship towards a music fan that seems more willing to invest in headphones than high-end speakers. “These last few weeks have been tough for everyone at Sonos,” wrote Sonos co-founder John MacFarlane in a company blog post. “We’re a tight bunch, so saying goodbye is particularly painful. But I know that making these changes is the right thing to do for Sonos as we look to the future.”
Sonos’ turbulence is happening alongside an absolute surge in music streaming, with paid subscriptions easily crossing the 50 million-mark. Many of those subscribers are serious music fans, with portable music collections often accessed through high-end, $300-plus headphones. The problem for Sonos is that many of those ‘higher-end’ users aren’t taking the next step towards audio hardware, especially those that favor flexible, on-the-go lifestyles that are easily dragged down by ‘stuff’.
The rest aren’t subscribing to services like Spotify, and seem heavily disinterested in perks like higher-end fidelity. But are stereos dying? Tough question, though the same dataset that shows heavy use of computer speakers and headphones also shows a core, niche attraction to higher-end products like wireless speakers and ‘loudspeaker’ component systems.
All of that is undoubtedly affecting Sonos, a company whose smart stereos seamlessly integrate with a range of streaming platforms. That includes Spotify, Rhapsody, Apple Music, and Pandora, though it’s becoming unclear if enough consumers want the go-between. “The shift is not complete as a few laggards continue to cling to fading business models, but it’s inevitable now,” MacFarlane wrote. “The only question that remains is how fast the growth of paid subscription services will be.”
Also disrupting the landscape are ‘lower-end’ solutions like Amazon’s Echo, a quick-and-easy connected speaker that revolves around smart voice controls. Indeed, that was mentioned by MacFarlane, who pointed to a strategic realignment around paid streaming and voice-enabled controls. “Alexa/Echo is the first product to really showcase the power of voice control in the home” MacFarlane continued. “Its popularity with consumers will accelerate innovation across the entire industry.”
“What is novel today will become standard tomorrow. Here again, Sonos is taking the long view in how best to bring voice-enabled music experiences into the home. Voice is a big change for us, so we’ll invest what’s required to bring it to market in a wonderful way.”