Sonos, a staple of Santa Barbara’s tech community since it was founded in 2002, announced last week it will be restructuring and laying off staff.
The company, which is most famous for its wireless speaker systems that can integrate with other devices, employs about 1400 people around the world. Some 400 people work at the company’s headquarters in Santa Barbara.
In a blog post last week, CEO John MacFarlane said Sonos is “navigating an industry in transition” and “investing in the future of music.” The specifics were left unclear. He didn’t spell out exactly how many people will be let go, and from which locations.
Business Insider editor Tim Stenovec has been covering Sonos for years. He spoke with KCRW about the news of layoffs.
KCRW: Sonos seems to be growing in Santa Barbara. What precipitated these layoffs?
Stenovec: It’s true, it was growing. For years, it was growing. It was, and still is the leader in the connected speaker space. But, over the last few years we’ve seen a lot less expensive competition come in. Mainly, the device from Amazon called the Amazon Echo, which uses voice-controlled technology to request an Uber, play music, order a pizza and serve as a hub for the smart home.
Why does competition mean layoffs?
Sonos’ CEO John Macfarlane wrote a blog post last week that talked about a restructuring of the company. He highlighted two main areas of interest they wanted to pursue: voice-controlled technology (similar to what you’d find with the Echo) and streaming music services. When Sonos started 13 years ago, the vast majority of people who were using its products were ripping CDs and using their own personal collections to play music out of its connected speakers. But, the industry has changed a lot since then. Now, streaming music has become the dominant way people listen to music. That forces Sonos to reconsider the direction it wants to take the company.
Is it common for a tech company to restructure?
With early stage startups, it’s really common for companies to change directions. There’s even a term mocked in the tech industry: pivot. But, it’s a lot more rare for a company the size of Sonos that has about 1400 employees and offices around the world to do a big restructuring like this. That said, it’s not completely unheard of, and MacFarlane thinks its something that the company has to do in order to succeed in this new market.
Will it be hard for laid off Sonos employees to find work in Santa Barbara?
Having Sonos on your resume is always going to be a good thing. That said, Santa Barbara is an expensive place to live, and even though there’s a growing tech scene, it’s not nearly the size of what you’d find in L.A., San Francisco or New York. There won’t be as many jobs for laid off employees to find, but I know the company is working with the laid-off employees to find other employment.