Sonos is cutting jobs in its product development organisation as the company prepares to expand into headphones, adding to recent upheaval at the maker of smart speakers and audio gear.

Chief product officer Maxime Bouvat-Merlin announced the move in an e-mail to employees on Wednesday, following the company’s quarterly earnings report. He said that affected staff would be notified via e-mail and that conversations with those being terminated would occur on Thursday. He didn’t specify how many roles would be eliminated.

The move follows an earlier belt-tightening in June that cut 7% of jobs. The company’s sales fell 6% in the fiscal year that just ended, dragged down by a broader slowdown in consumer tech spending. Smart speakers and other home devices have been a particularly difficult market, with many consumers holding off on upgrades.

In his memo, Bouvat-Merlin said that the latest cuts were due to “a shift in product strategy” and didn’t stem from an earlier effort to cut operating expenses. In September, the executive embarked on a reorganisation of the company’s product group that led to 200 employees getting new roles, teams or managers, he said.

“In some cases, this process has surfaced some roles which unfortunately are no longer aligned with our product ambitions and current needs,” Bouvat-Merlin wrote.

The company told employees that meetings would be held soon with remaining employees to outline how teams will be changing. The organisation will also hold an all-hands meeting to address the shake-up on 7 December.

Sonos, based in Santa Barbara, California, declined to comment.

Headphones

In the memo, Bouvat-Merlin also disclosed that a Sonos team is dedicated to headphones. The company has been working on headphones for more than four years, but such a product has yet to be announced.

The company also has teams focused on home products, portable speakers and voice control. “The structure intends to give teams the focus and autonomy to make quicker, higher-quality decisions and execute with greater agility,” Bouvat-Merlin said.

Read: Speaker maker Sonos debuts $35/month Pro service

During its earnings call on Wednesday, Sonos CEO Patrick Spence said the company would be rolling out a lucrative new product in the coming months.

“The second half of the year, we will be launching a major product in a new, multibillion-dollar category that will complement our current offerings, excite customers and drive immediate revenue,” Spence said. “All told, we expect to generate over US$100-million from new product introductions this year, with this exciting new product accounting for a large portion of this revenue in the second half.”

Bouvat-Merlin said new offerings — codenamed Lasso, Pinewood and Premier — are in the works for the near future.

While Sonos beat estimates for its fourth quarter, its revenue forecast for fiscal year 2024 came in light. The company predicted sales of $1.6-billion to $1.7-billion — the midpoint of which fell below Wall Street projections. — (c) 2023 Bloomberg LP