Sonos CEO Patrick Spence Steps Down Amid App Troubles and Leadership Shake-Up

Sonos CEO Patrick Spence is stepping down and leaving the company's board as part of a leadership shake-up, amid efforts to regain customer trust following a series of missteps.

The company, based in Santa Barbara, faced significant backlash last year after botching the update of its phone app, which customers use to control their wireless speakers and other audio devices.

The issues with the app, along with the failed attempts to fix them, left many users unable to operate their speakers and led to frustration among loyal customers, ultimately affecting the company’s financial performance.

Sonos CEO Patrick Spence Steps Down Amid App Troubles and Leadership Shake-Up

Spence, who has been at the helm of Sonos for eight years, will continue working with the company until June 30 in a strategic advisory role, as outlined in a regulatory filing. He will receive a severance package of $1.9 million.

Tom Conrad, a long-serving member of Sonos' board, will step in as interim CEO. Conrad, 55, has experience in various executive roles, including at Quibi, Snap, and Pandora Media, and he will also be leading the company through this transition. He will receive a monthly salary of $175,000, along with $2.65 million in restricted stock units from Sonos.

"I am honored to take on this role at such a pivotal time for Sonos," Conrad said. "Almost two decades ago, I helped integrate Pandora with Sonos, and that experience gave me an early understanding of the incredible impact Sonos can have on people's lives."

Sonos' troubles with its app have had a financial impact. To address the issues, the company announced a plan to invest between $20 million and $30 million to improve the app, enhance customer support, create a customer advisory board, and extend warranties on some products. Executives committed to forfeiting their annual bonuses if the plan was unsuccessful.

The company also laid off 100 employees in August, or 6% of its workforce, in an attempt to cut costs.

Facing competition from major players like Amazon, Bose, and Apple in the smart speaker market, Sonos has seen its stock price drop by over 14% over the past year, with shares currently trading at $13.49. The company is set to release its fiscal first-quarter results in February.