Exclusive: Struggling US audio company Sonos is weighing a radical overhaul of its Australian business, with industry sources claiming the company has  considered moving back to a full distribution model in Austrsalia  as it accelerates global cost-cutting following another round of layoffs.

The speculation comes after the US -based premium audio manufacturer overnight cut a further 3% f its global workforce, the latest in a string of restructures aimed at stemming falling sales and restoring profitability after one of the most damaging product crises in the company’s history.

Sources familiar with the discussions said Sonos has been evaluating the potential savings from handing responsibility for the Australian market to a distributor, rather than maintaining its current hybrid sales model.

Westan already distributes Sonos products into Australia’s custom installation and specialist audio channel, while Sonos manages relationships directly with major national retailers including JB Hi-Fi, Harvey Norman and The Good Guys.

At the same time, Sonos has been aggressively expanding its Amazon presence, using Prime Day promotions and heavy discounting to drive sales as demand for its premium speakers softens.

The latest layoffs follow significant staff reductions earlier this year and in 2025 as Sonos continues to deal with the fallout from a disastrous software rollout that shattered customer confidence and triggered one of the worst crises in the company’s history.

Former CEO Patrick Spence oversaw the launch of a completely rebuilt Sonos app in 2024, replacing the existing platform despite widespread concerns over its readiness. The new software shipped with missing features, unreliable performance and sluggish controls, prompting a fierce customer backlash from what had long been one of the consumer electronics industry’s most loyal user bases.

The software failure also overshadowed the launch of Sonos’ Ace headphones, with the company subsequently reporting falling revenue, widening losses and a sharp decline in its share price.

The brand now faces growing competition from Bose, Denon and other premium audio manufacturers as consumers increasingly abandon the Sonos ecosystem.

New CEO Tom Conrad, who was appointed permanently after initially stepping into the role on an interim basis, has moved quickly to simplify the business and reduce costs while attempting to rebuild trust in the brand.

In a memo to employees seen by Bloomberg, Conrad said the latest restructuring was designed to make Sonos faster and more competitive.

“I want a Sonos that moves with more conviction and more velocity,” Conrad wrote. “Fewer months in conference rooms. More prototypes in our labs. More decisions made and executed. More exceptional products in the world for our customers.”

Investors reacted negatively, with Sonos shares falling following the announcement.

Conrad, a Sonos board member since 2017 and co-founder of music streaming pioneer Pandora, has focused on lifting software quality while rebuilding the company’s product roadmap.

His strategy has been to “do fewer things, but do them better,” resulting in several hardware projects being delayed or cancelled, including the long-rumoured Pinewood streaming device that was reportedly close to launch before being shelved.

The company has also repositioned its pricing strategy, cutting the price of its Era 100 speaker to what Conrad describes as a “magic spot” that remains premium while attracting new customers.

The Ace headphones have also been heavily discounted as Sonos attempts to clear inventory and revive interest in a product that became collateral damage during the app debacle.

Only two months ago the company also restructured its marketing division, eliminating multiple positions as Chief Marketing Officer Colleen DeCourcy sought to simplify what she described as a fragmented organisation burdened by overlapping responsibilities and excessive internal handoffs.

As of May 31, Sonos employed approximately 1,840 people globally.

The company has promised new hardware launches during the second half of fiscal 2026 and is betting heavily that software improvements will finally restore customer confidence.

Earlier this month Sonos began testing a redesigned version of its app featuring a simplified navigation system, improved volume controls and a more intuitive interface.

In a Reddit post, Conrad said the redesign was based on hundreds of hours observing both existing and new customers using Sonos products.

“The team has spent hundreds of hours over the past year watching real customers use the Sonos app, longtime owners and brand new ones alike,” he wrote.

Whether that is enough to reverse Sonos’ decline remains uncertain. With restructuring continuing, deeper cost reductions underway and the Australian operation now under review, the company is entering its most critical rebuilding phase since the app failure that derailed one of consumer electronics’ strongest premium brands.