Sonos, Inc. SONO revealed a major restructuring plan that will reduce its workforce by about 12%.

Finalized on February 4, 2025, this initiative is designed to enhance the company’s operational efficiency and financial framework.

The workforce reduction is expected to impact about 200 positions in various regions, subject to local laws and consultations.

Sonos expects restructuring expenses between $15 million and $18 million, mainly for severance pay and employee benefits.

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These costs are anticipated to be recognized in the second quarter of fiscal 2025.

“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. So across the company today we are reorganizing into flatter, smaller, and more focused teams,” said CEO Tom Conrad.

The audio equipment maker’s former CEO, Patrick Spence, stepped down from the role in January, following an app update that resulted in a decrease in sales and customer satisfaction for Sonos.

Although products like the Sonos Ace headphones and Arc Ultra soundbar have been well-received, Sonos still faces a difficult path ahead in rebuilding its brand and strengthening customer relationships.

For the first quarter FY25, the company reported revenue and adjusted EPS of $551 million and 64 cents, both surpassing the analysts consensus estimates.

Price Action: SONO shares are trading higher by 9.08% at $15.56 at the last check Thursday.

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