Sonos Lays Off 12% of its Workers and Closes New York Store

Sonos, the audio-products retailer, cut 12% of its staff and is closing its New York retail store and six satellite offices.
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Sonos  (SONO) - Get Report shares gave up gains on Wednesday after the audio-products retailer said it’s dropping 12% of its global workforce.

The Santa Barbara, Calif., company employs more than 1,450 people, so that could mean about 175 workers lose their jobs.

In a Securities and Exchange Commission filing, the company also said it would close its New York retail store and six satellite offices. The moves come in reaction to the coronavirus pandemic, which has hammered many retailers.

“These actions are solely related to the company’s previously disclosed initiative to reduce operating expenses and preserve liquidity in the face of the pandemic," Sonos said. 

The moves do not reflect "any material changes in the company's business since it reported second-quarter fiscal 2020 [ended March 28] results.” 

The terminations and site closures will result in about $25 million to $30 million in restructuring and related impairment charges, the company said.

The majority of these costs are expected to be incurred in the fiscal third quarter. Sonos expects about $9 million to $11 million of the restructuring charges to result in cash expenditures.

Meanwhile, Citron Research placed a $30 price target on Sonos Monday. It cited Sonos’s strength in the stay-at-home environment created by the pandemic.

“Sitting at the intersection of stay at home, streaming wars, and the connected home, Sonos has quickly emerged as the leader of sound in the connected home,” Citron said in a commentary.

Sonos shares recently traded at $13.89, off 1.5%. Earlier on Wednesday they'd traded up as much as 3.9% at $14.65. They have jumped 72% in the past three months.