Sonos Chief Executive Patrick Spence is stepping down and leaving the company’s board in a shake-up that comes as the wireless speaker maker tries to win back the trust of its customers.
Last year, the Santa Barbara-based company botched the overhaul of its phone app customers use to control their speakers and other audio products. The misstep and bumbled efforts to correct it, which left many unable to work their speakers, infuriated the brand’s loyal customers and took a toll on the company’s bottom line.
Spence, who has led Sonos for eight years, will be employed with the company until June 30 and provide strategic advisory services, according to a regulatory filing. He will receive a cash severance payment of $1.9 million.
Tom Conrad, a longtime Sonos board member, will serve as the interim chief executive.
Sonos said Monday in a news release that it’s working with an executive search firm to find a new chief executive “who will build on the Sonos legacy of innovation and excellence in serving its customers while also driving profitable growth.”
Conrad, 55, served as chief executive of Zero Longevity Science and previously worked in executive roles at Quibi, the short-lived streaming platform, Snap and Pandora Media. He will receive $175,000 per month as Sonos’ interim CEO and be awarded $2.65 million of Sonos restricted stock units.
“I am deeply honored to step into this role at such an important moment for Sonos,” Conrad said in a statement. “Nearly two decades ago, when I led the earliest initiative to integrate Pandora and Sonos, I got my first glimpse of the magic that Sonos could bring to millions of lives every day.”
Sonos’ app debacle has been costly. The company said last year it would invest between $20 million and $30 million to fix the app and provide more customer support, create a customer advisory board and extend its warranty for certain products, among other changes. Executives pledged to forgo their annual bonuses if the plan failed.
In August, the company said it would lay off 100 employees, which amounted to 6% of its workforce.
Sonos, competing against Amazon, Bose, Apple and other tech giants that make smart speakers, also saw its stock plummet. Sonos stock has dropped more than 14% over a year to $13.49 per share. The company is scheduled to report its fiscal first-quarter results in February.
