Close ☰
Menu ☰

Sennheiser – drop in retail and Covid-19 triggers job cuts

Posted on: Wednesday 22nd of July 2020

Owing to the effects of the COVID-19 pandemic on its consumer and professional businesses, as well as a slowdown in the headphone market (owing to retail store closures), Sennheiser will cut around 650 employees by the end of 2022, with 300 of those job losses in Germany. Sennheiser’s fiscal year 2019 saw the company grow in its professional division, while reporting below expectations in the consumer business. Total Sennheiser Group turnover was $863m 6.5% more than in 2018.

The company attributed much of its slide on the consumer side to the worldwide headphone market, which has declined by 30-40% recently due to physical retail outlets worldwide being closed or working shortened hours. In order to mitigate those effects, in March, the company introduced cost reductions and reduced working hours in Germany and internationally.

The effect of COVID-19 has also been felt in the company’s live sound microphone sales, as Daniel Sennheiser reported: “With the cancellation of live events all over the world, the entire event and music industry has been practically brought to a standstill and is only slowly getting back on track. The future of many rental companies, and other service providers is under threat. This is having a significant impact on sales of microphones, which will continue to be reflected in our business performance next year. Exceptions are studio microphones.”

With imminent job cuts and an expected continued downturn ahead, Sennheiser added that it proposes to continue funding R&D, including the development of its AMEBO immersive audio technology. “To create innovative audio experiences for our customers and to shape the future of the audio industry, we are continuously investing in our development activities, “ said Dr. Andreas Sennheiser. Sennheiser Group’s investments in 2019 increased by 4.1% to $71.8 million (8.3% of turnover).

The family-owned company generated turnover of €756.7 million; earnings before interest and taxes (EBIT) of €18.5 million were slightly down compared to the previous year. “We look back on a rather mixed fiscal year 2019. In addition, we face major challenges this year due to massive changes in the consumer market and the declining demand for audio products because of the COVID-19 crisis. In order to position the company for a successful future, we will adapt our organizational structure to the changing conditions and align it with the new requirements,“ said Daniel Sennheiser, co-CEO of Sennheiser.

“We will continue to focus on our core competencies and further strengthen both our consumer and professional divisions by transferring operational responsibility completely to these two business areas. Sennheiser has always stood for excellent sound quality and extraordinary audio experiences since its foundation 75 years ago – this is what we will continue to stand for in the future,“ added Dr. Andreas Sennheiser, co-CEO of the company.

The adjustment of the organizational structure will result in job cuts throughout the company, particularly in corporate functions such as Supply Chain and Operations. Overall, Sennheiser plans to cut up to 650 jobs worldwide by the end of 2022. The reduction is to be implemented in the most socially responsible manner possible. Measures under consideration include not filling open positions, a voluntary redundancy scheme and severance options in addition to opportunities for partial and early retirement. “We are a family-owned company and every single one of our employees is part of the team. Together we share a passion for audio. With this in mind, these have been very difficult decisions to make and it is important to us primarily to avoid redundancies and to find individual solutions together with employees,” said Dr. Andreas Sennheiser, co-CEO.

Effects of the COVID-19 crisis on the audio market
Since the beginning of 2020, the global effects of the COVID-19 pandemic have also presented Sennheiser with major challenges. “With the cancellation of live events all over the world, the entire event and music industry has been practically brought to a standstill and is only slowly getting back on track. The future of many rental companies, and other service providers is under threat. This is having a significant impact on sales of microphones, which will continue to be reflected in our business performance next year. Exceptions are studio microphones,“ explained Daniel Sennheiser.

Dr. Andreas Sennheiser, Daniel Sennheiser, co-CEOs

Fiscal Year 2019
Sennheiser looks back on a rather mixed fiscal year 2019: Although the audio specialist was able to achieve strong growth in the professional division, it was below expectations in the consumer business. In total, the Sennheiser Group generated turnover of €756.7 million, which is €46.0 million or 6.5% more than in 2018, while EBIT of €18.5 million was slightly below the previous year’s level of €21.2 million.

In the fiscal year 2019, the professional division generated turnover of €363.3 million, an increase of 9.2% over the previous year. Growth was driven in particular by the product categories of live music, studio recording and business communication. The consumer division generated turnover of €393.4 million. Although turnover increased by 4.1%, or €15.4 million, this was significantly below the growth of the headphone market as a whole. Despite the successful launch of new headphone models in the premium segment, the acceleration of market dynamics and increasing competition in the headphone market had a negative impact.

Taking a global view of the markets, EMEA continued to be the region with the highest turnover in 2019 with €382.7 million. This corresponds to an increase in turnover of 6.4% or €22.9 million. In its home market Germany, Sennheiser was able to increase turnover by 1.8%, or €1.9 million, for a total of €103.1 million. The APAC region recorded the highest increase in percentage terms with 10.6%. Total turnover here amounted to €175.3 million. This is €16.8 million more than in the previous year. Growth was driven in particular by the markets in China, Japan and South Korea. In the Americas region, turnover increased by €6.3 million, or 3.3%, year on year to €198.7 million.

www.sennheiser.com



Latest News & Blog articles

  • With the release of Solid State Logic’s ORIGIN studio console, director of new products, Niall Feldman, explains why the company went back to their roots to create a new analogue console to fit today’s music production requirements. “In more than 40 years of developing consoles for changing studio workflows, in conceiving ORIGIN our thoughts returned […]
  • Genelec’s new G LearningLab educational program is to kick off this August with a series of tutorials focussing exclusively on the company’s GLM loudspeaker manager software. Entitled ‘6 steps to creating your Sonic Reference’, the training sessions will also be used to unveil GLM 4 – the newest version of the software – which is […]
  • The PreSonus developers have been busy! When touring resumes, the new version of the DAW is bound to be popular with stage-techs dealing with stems and playback elements for artists. Studio One 5 introduces a fully integrated live performance environment capable of running complete shows from a single computer. The Show Page combines playback of […]
  • London music school, ICMP (The Institute of Contemporary Music Performance), alongside music industry partner The Music Producers Guild (MPG), have teamed up to offer an opportunity for a talented student to develop their skills and potential through its new Music Production scholarship. The initiative has been created for anyone passionate about music production, but who might […]
  • Mark Asquith is one of the UK’s new breed of podcasters. He’s recently returned from what was to be a nine-week tour of the USA where he was speaking at the big podcasting conferences, including Podcast Movement Evolutions and Podfest, that his company, Rebel Base Media, was sponsoring. With the tour cut short due to […]
  • AIM (Association of Independent Music), the BPI (British Phonographic Industry), MPG (Music Producers Guild) and the MU (Musicians Union) have put together a comprehensive guide on Working safely during COVID-19 in professional workplaces for music & music video production. This guide is to support music industry workers looking to return to studios, rehearsal spaces and […]
  • Neumann has introduced the V 402 – a state-of-the-art microphone preamplifier with integrated headphone monitoring. The V 402 is Neumann’s first-ever stand-alone microphone preamp – although the company has created several generations of top-quality preamp modules for its mixing consoles, such as the V 476 B of the 1980s. “All Neumann microphones, classics as well […]
  • According to reports from Red Bull insiders plus US and Canadian national newspapers, Red Bull will be closing and/or selling-off its music studios as part of a cutting back of the company’s ties with the entertainment industry. The Wall Street Journal reported: “The maker of Red Bull energy drinks has replaced its top US executives […]
Translate »