Sonos shares slumped 3.7% last night, after the struggling sound Company moved to sack more than 7% of the workforce while also suspending ambitious research and development programs.

A filing with the US Securities and Exchange Commission (SEC) has revealed that the Company is not in good shape with executives also looking to close facilities and sell down property assets.

The business that has struggled to make a profit over several years, was punting on the recent launch of new networked speakers to lift sales but this failed to eventuate.

More than 130 staff are set to get the chop including Australian employees.

“In the face of continued headwinds, we have had to make some hard choices, including eliminating some positions and revaluating program spend,” Sonos CEO Patrick Spence said.

The mass sackings is estimated to cost the company somewhere between $11 million to $14 million.

Analysts believe that despite the overnight sackings the company is still being impacted by “headwinds.”

The business has also been forced to revise downward their forward guidance for 2023 revenues and earnings, now saying 2023 will have lower revenues and profits as compared to fiscal 2022.

The business has struggled to grow their soundbar sales with the business also carrying excessive stock levels due to poorer than anticipated demand for their new Sonos Era and Sonos Era 300 with the business resorting to discounting in an effort to clear stock in several markets.

The company also said in its SEC filing that they are “re-evaluating certain program spend.” This is an apparent reference to cutting marketing and advertising costs as well as rebates to retailers.

The company says that it remains committed to “right size its cost base while still investing in its product roadmap to drive future growth.”

Sonos cut its guidance in its most recent earnings report for the period ended April 1, 2023. Revenue decreased 23.9% year over year, to $304.2 million.

The company had previously cut head count by 12% in 2020, in response to the rapidly unfolding Covid pandemic.