Sonos announces layoffs as voice control market heats up
March 11, 2016
VC-backed wireless speaker company Sonos has announced a reduction in staff as it looks to shift resources and focus toward paid streaming services and the voice control space. While the company has seen past success with its high-quality speakers that enable collaborative listening experiences, the market has moved, and Sonos must move with it or be left behind. Innovate or die, as some say.
The timing of the layoffs and shift in focus is interesting, as the category leader, Amazon, recently announced an expansion of its voice control line with the introduction of two new products. One of the products, the Echo Dot, takes direct aim at Sonos’ market. Its lower price point and miniature size make it more viable for a customer to buy multiple devices and place one in each room of their residence. All the devices within a house can then connect to create a seamless music playing experience. If the Echo Dot gains popularity like its predecessor, it could take a sizable bite out of Sonos’ profits.
Sonos has raised nearly $100 million in VC funding from firms such as e.ventures, Index Ventures and Redpoint Ventures. Its last equity financing was a $45 million Series D round in mid-2012 at a valuation of $619 million.