Sonos lays off 200 employees amid financial struggles.

Sonos faces significant challenges following the recent layoffs that affected around 200 employees. This decision was communicated today around 4 PM ET through a letter from interim CEO Tom Conrad published on the company’s website. Conrad noted that the company has fallen into an overly complex organizational structure, making collaboration and effective decision-making difficult. Therefore, the goal is to restructure Sonos into smaller, more focused teams.

This move is part of a broader effort by the company to improve its operations at a critical time. Sonos is scheduled to report its quarterly earnings on Thursday, and the recent actions could indicate that short-term prospects are not very encouraging.

The wave of layoffs is more significant than the one that occurred in August when the company laid off 100 workers. The company is facing a decline in demand for its products and pressure to overcome the damaged reputation resulting from a controversy related to its app last year, which ultimately led to the firing of former CEO Patrick Spence.

Conrad has promised to make improvements to the mobile app, which launched with many issues this year, presenting bugs and lacking essential features. Since then, Sonos has been working to address these faults, although the new round of layoffs could further affect the morale of a team that is already struggling to rectify the mistakes of previous leadership.

Sonos's organizational structure will be divided into groups dedicated to hardware, software, design, quality, and operations, moving away from business units focused on individual product categories. According to Conrad, this new organization will allow for better prioritization of work and correct previous deficiencies in commitment to various projects.

After launching the acclaimed Arc Ultra soundbar last year, Sonos's next hardware release will be a high-end streaming player that will also function as an HDMI switch, among other functionalities.