Sleep Number Announces Layoffs & Store Closings

The mattress industry is witnessing a significant shake-up as Sleep Number, a key player based in Minneapolis, undertakes a strategic restructuring to align with current economic pressures. The company’s recent decision to reduce its workforce by 10% reflects a broader initiative to curtail operating expenses by up to $50 million. This reduction equates to approximately 500 dedicated employees parting ways with the manufacturer.

This decision, detailed in their latest quarterly SEC filing, has not gone unnoticed by the market, with Sleep Number’s stock plummeting 29% following the announcement on November 8th. The workforce reduction spans across multiple departments, notably corporate and R&D, signaling a comprehensive approach to cost management. This move comes on the heels of a reported net loss in Q3 of 2023, marking a stark contrast to the net income secured during the same period in the previous year.

The contraction in workforce is accompanied by an equally strategic reevaluation of the company’s physical footprint. Sleep Number intends to close 40 to 50 stores by the end of 2024 and reassess the pace of new store openings. Furthermore, the company plans to scale down capital expenditures, underlining a cautious approach to spending amidst unpredictable market conditions.

Shelly Ibach, the Chair, President, and CEO of Sleep Number, remains confident that these restructuring efforts are a pathway to a more sustainable and profitable operational framework. The adjustments come as the company navigates a shifting consumer demand landscape, a challenge that many in our industry are currently facing.