Sonos celebrates its IPO at the Nasdaq, August 2, 2018.
Speaker maker Sonos plans to cut 12% of its global workforce due to “uncertainty and challenges stemming from the Covid-19 pandemic,” the company announced in a filing Tuesday. It’s also closing its retail store in New York City 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. It said those actions included cutting marketing investments, managing and “tightening” inventory and eliminating some discretionary operating expenses.
The company’s stock was up more than 1% Wednesday morning. It wasn’t immediately clear how many employees the company currently has, but the company’s investor relations website says it has 1,450 employees.
The filing adds that the company will provide further detail on its business and cost savings resulting from the initiatives when it reports its fiscal third-quarter 2020 results. Sonos estimates the terminations and site closures will cost an estimated $25 million to $30 million in “restructuring and related impairment charges,” the majority 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 base salary of the company’s CEO between July 1 and December 31, and for other executive officers between July 1 and September 30 of this year. All board members will also forgo their annual cash retainer between July 1 and December 31.