Sonos (SONO.O) has announced that CEO Patrick Spence will step down following a highly criticized app update that significantly affected the company’s customer experience and delayed product releases. The decision comes after the company faced a backlash over its May 2024 app update, which left users unable to perform key functions such as accessing their music libraries, searching for tracks, setting sleep timers, or downloading the app itself.
The company has appointed board member Tom Conrad as interim CEO, effective immediately. Conrad, who was previously the CEO of Zero Longevity Science, a company specializing in metabolic health, will take the reins while Sonos addresses its ongoing issues.
Sonos acknowledged that it would cost an estimated $20 million to $30 million to fix the app’s problems. To mitigate the financial impact, the company announced it would reduce its workforce by approximately 6%. The app’s failure and the subsequent operational challenges have led to a decline in Sonos’ stock, which fell by more than 8% on the news. The company has already seen its stock lose about 12% of its value in 2024, and it has forecast a decline in first-quarter sales of between 9% to 22% from the previous year.
In October, Spence admitted the mistakes surrounding the app’s launch, and in a move to demonstrate accountability, he and seven other executives forwent their bonuses. Despite these efforts, Sonos continues to face market challenges exacerbated by the app’s poor reception.
