Sonos

A day after announcing that CEO Patrick Spence is departing the company, Sonos revealed that chief product officer Maxime Bouvat-Merlin is also leaving. Bouvat-Merlin had the role since 2023.

As first reported by Bloomberg, Sonos will not fill the chief product officer role. Instead, Tom Conrad, the interim CEO Sonos announced yesterday, will take on the role’s responsibilities. In an email to staff cited by Bloomberg (you can read the letter in its entirety at The Verge), Conrad explained:

With my stepping in as CEO, the board, Max, and I have agreed that my background makes the chief product officer role redundant. Therefore, Max’s role is being eliminated and the product organization will report directly to me. I’ve asked Max to advise me over the next period to ensure a smooth transition and I am grateful that he’s agreed to do that.

In May, Sonos released an update to its app that led to customers, many of them long-time users, revolting over broken features, like accessibility capabilities and the ability to set timers. Sonos expects that remedying the app and Sonos’ reputation will cost it at least $20 million to $30 million. 

As head of the company, Spence received a lot of blame and has also been criticized for not apologizing for the problems until July. However, numerous reports have also attributed blame to Bouvat-Merlin.

After an app update rollout that can best be described as disastrous, Sonos is seeking a new CEO. The company announced today that Patrick Spence, who had been CEO for eight years, is stepping down.

In its announcement, Sonos said its board of directors and Spence “agreed” on the decision while saying it was unrelated to the company’s fiscal Q1 2025 earnings, which it will report next month.

Spence joined Sonos as chief commercial officer in 2012 after leaving Blackberry. Under his tenure, Sonos branched into new categories, including portable speakers and spatial audio. But in May, Sonos issued an app update that broke basic and critical features. Sonos employees said the update was built on outdated code and infrastructure, impacting users’ ability to do things like access and manage local libraries, set sleep timers, and edit song queues and playlists.

The employees also said the app was rushed so that it could be ready in time for Sonos’ first wireless headphones, Ace. In July, following much public backlash, Spence apologized and promised regular updates until the new app was as good as the old app. But even today, users are still reporting problems with the software.

In August, Spence said Sonos would spend $20 million to $30 million “in the short term” to fix the app. Soon after, Sonos laid off 100 people. Sonos’ stock price declined approximately 13 percent since the app update, Bloomberg noted. Sonos execs, including Spence, received a $72,000 bonus in 2023 but did not get bonuses for the fiscal year that ended on September 30.

Spence will receive a cash severance of $1,875,000, per SEC filings. He will also get $7,500 per month and serve as a Sonos board advisor until June, and his unvested shares will vest.

Tom Conrad, who has been on Sonos’ board since 2017, took the role of interim CEO today. Sonos plans on having a new CEO by February via the help of a third-party firm. In the meantime, Conrad will get $175,000 per month and receive $2.65 million in stock shares.

Sonos’ controversial app update in May was “obviously a failure,” Sonos CEO Patrick Spence told Reuters today.

When the update launched in May, customers revolted over missing features, like the ability to search music libraries, edit song and playlist queues, and set sleep timers. In addition, some already purchased hardware, especially older models, began having problems.

In a note to investors on Tuesday, Sonos said that “more than 80 percent of the app’s missing features have been reintroduced.” The app should be “almost 100 percent restored in the coming weeks.” Sonos has been updating the app every two weeks in an effort to bring it to parity with the old one.

Speaking to Reuters, Spence took the blame for an app said to be rushed out prematurely ahead of Sonos’ first headphones, Ace. 

“This is obviously a failure of Sonos, but it starts with me in terms of where it started,” he said.

The CEO reportedly admitted to the botched rollout stemming from a lack of proper testing and a desire to push out a lot of features simultaneously:

We underestimated the complexity of the system, and so our testing didn’t capture all of the things that it should. We released it too soon.

Sonos was reportedly eager to get the app out to accommodate Ace, resulting in an overhaul of the app, its player side, and Sonos’ cloud infrastructure. Last month, purported former and current Sonos employees spoke about the app accumulating technical debt before being forced into an update that wasn’t ready and overlooked some workers’ concerns.

No executive bonuses for now

Reuters reported today that Spence and seven other execs “would forgo their bonus in the most recent fiscal year,” which ended on September 30. The publication noted that Spence got a bonus of approximately $72,000 for fiscal year 2023. Reuters reported that the company heads have “certain benchmarks” to meet to receive bonuses for the October 2024 to September 2025 fiscal year.

It’s not hard to understand why the executives aren’t getting their bonuses. In addition to the damage that the botched app redesign has wrought on Sonos’ reputation—aggravating long-time customers and deterring prospective ones—the app has had tangible financial consequences. The Santa Barbara, California company is expecting to pay up to $30 million in the short term to fix the app and try to restore customer and partner trust. The company also delayed two hardware releases, which led it to reduce its fiscal 2024 guidance. Sonos shares have fallen more than 30 percent since before the app update, Reuters noted.