diff --git a/meet-ce/frontend/projects/shared-meet-components/src/lib/customization/components/meeting-custom-layout/meeting-custom-layout.component.html b/meet-ce/frontend/projects/shared-meet-components/src/lib/customization/components/meeting-custom-layout/meeting-custom-layout.component.html
index ed89606a..6c23bc29 100644
--- a/meet-ce/frontend/projects/shared-meet-components/src/lib/customization/components/meeting-custom-layout/meeting-custom-layout.component.html
+++ b/meet-ce/frontend/projects/shared-meet-components/src/lib/customization/components/meeting-custom-layout/meeting-custom-layout.component.html
@@ -1,14 +1,14 @@
 @if (meetingContextService.lkRoom()) {
-	<ov-layout [ovRemoteParticipants]="filteredRemoteParticipants()">
-		@if (showMeetingLinkOverlay()) {
+	<ov-layout [ovRemoteParticipants]="visibleRemoteParticipants()">
+		@if (shouldShowLinkOverlay()) {
 			<ng-container *ovLayoutAdditionalElements>
 				<div id="share-link-overlay" class="main-share-meeting-link-container fade-in-delayed OV_big">
 					<ov-share-meeting-link
 						class="main-share-meeting-link"
-						[title]="linkOverlayTitle"
-						[subtitle]="linkOverlaySubtitle"
-						[titleSize]="linkOverlayTitleSize"
-						[titleWeight]="linkOverlayTitleWeight"
+						[title]="linkOverlayConfig.title"
+						[subtitle]="linkOverlayConfig.subtitle"
+						[titleSize]="linkOverlayConfig.titleSize"
+						[titleWeight]="linkOverlayConfig.titleWeight"
 						[meetingUrl]="meetingUrl()"
 						(copyClicked)="onCopyMeetingLinkClicked()"
 					></ov-share-meeting-link>
diff --git a/meet-ce/frontend/projects/shared-meet-components/src/lib/customization/components/meeting-custom-layout/meeting-custom-layout.component.ts b/meet-ce/frontend/projects/shared-meet-components/src/lib/customization/components/meeting-custom-layout/meeting-custom-layout.component.ts
index 4539d504..9dffeaaf 100644
--- a/meet-ce/frontend/projects/shared-meet-components/src/lib/customization/components/meeting-custom-layout/meeting-custom-layout.component.ts
+++ b/meet-ce/frontend/projects/shared-meet-components/src/lib/customization/components/meeting-custom-layout/meeting-custom-layout.component.ts
@@ -1,19 +1,11 @@
-import { Component, signal, computed, effect, inject, DestroyRef, input, untracked } from '@angular/core';
-import { Participant } from 'livekit-client';
-import { LoggerService, OpenViduService, ILogger, OpenViduComponentsUiModule } from 'openvidu-components-angular';
-import { MeetLayoutMode } from '../../../models/layout.model';
+import { Component, computed, effect, inject, untracked } from '@angular/core';
+import { LoggerService, ILogger, OpenViduComponentsUiModule } from 'openvidu-components-angular';
 import { CustomParticipantModel } from '../../../models';
 import { MeetLayoutService } from '../../../services/layout.service';
 import { MeetingContextService } from '../../../services/meeting/meeting-context.service';
 import { ShareMeetingLinkComponent } from '../../../components/share-meeting-link/share-meeting-link.component';
 import { MeetingService } from '../../../services/meeting/meeting.service';
 
-/**
- * MeetingLayoutComponent - Intelligent layout component for scalable video conferencing
- *
- * This component implements an optimized layout system that displays only the N most recent
- * active speakers to maximize client-side performance and scalability.
- */
 @Component({
 	selector: 'ov-meeting-custom-layout',
 	imports: [OpenViduComponentsUiModule, ShareMeetingLinkComponent],
@@ -21,182 +13,114 @@ import { MeetingService } from '../../../services/meeting/meeting.service';
 	styleUrl: './meeting-custom-layout.component.scss'
 })
 export class MeetingCustomLayoutComponent {
-	private readonly loggerSrv = inject(LoggerService);
+	private readonly logger: ILogger = inject(LoggerService).get('MeetingCustomLayoutComponent');
 	protected readonly layoutService = inject(MeetLayoutService);
-	protected readonly openviduService = inject(OpenViduService);
-	protected meetingContextService = inject(MeetingContextService);
-	protected meetingService = inject(MeetingService);
-	protected readonly destroyRef = inject(DestroyRef);
-	private readonly log: ILogger = this.loggerSrv.get('MeetingCustomLayoutComponent');
-	protected readonly linkOverlayTitle = 'Start collaborating';
-	protected readonly linkOverlaySubtitle = 'Share this link to bring others into the meeting';
-	protected readonly linkOverlayTitleSize: 'sm' | 'md' | 'lg' | 'xl' = 'xl';
-	protected readonly linkOverlayTitleWeight: 'normal' | 'bold' = 'bold';
+	protected readonly meetingContextService = inject(MeetingContextService);
+	protected readonly meetingService = inject(MeetingService);
+
+	protected readonly linkOverlayConfig = {
+		title: 'Start collaborating',
+		subtitle: 'Share this link to bring others into the meeting',
+		titleSize: 'xl' as const,
+		titleWeight: 'bold' as const
+	};
 
 	protected readonly meetingUrl = computed(() => this.meetingContextService.meetingUrl());
 
-	protected readonly showMeetingLinkOverlay = computed(() => {
-		const remoteParticipants = this.meetingContextService.remoteParticipants();
-		return this.meetingContextService.canModerateRoom() && remoteParticipants.length === 0;
+	protected readonly shouldShowLinkOverlay = computed(() => {
+		const hasNoRemotes = this.meetingContextService.remoteParticipants().length === 0;
+		return this.meetingContextService.canModerateRoom() && hasNoRemotes;
 	});
 
-	/**
-	 * Whether the layout selector feature is enabled
-	 */
-	protected readonly showLayoutSelector = this.meetingContextService.showLayoutSelector;
+	protected readonly isLayoutSwitchingAllowed = this.meetingContextService.allowLayoutSwitching;
 
-	/**
-	 * Tracks the order of active speakers (most recent last)
-	 */
-	private readonly activeSpeakersOrder = signal<string[]>([]);
+	private displayedParticipantIds: string[] = [];
 
-	/**
-	 * Computed signal that provides the filtered list of participants to display.
-	 * Automatically reacts to changes in layout service configuration.
-	 * When showLayoutSelector is false, returns all remote participants (default behavior).
-	 */
-	readonly filteredRemoteParticipants = computed(() => {
-		const remoteParticipants = this.meetingContextService.remoteParticipants();
+	readonly visibleRemoteParticipants = computed(() => {
+		const allRemotes = this.meetingContextService.remoteParticipants();
 
-		// If layout selector is disabled, use default behavior (show all participants)
-		if (!this.showLayoutSelector()) {
-			return remoteParticipants;
+		if (!this.isSmartMosaicActive()) {
+			return allRemotes;
 		}
 
-		const isLastSpeakersMode = this.layoutService.isSmartMosaicEnabled();
+		const participantMap = new Map(allRemotes.map((p) => [p.identity, p]));
+		const availableIds = new Set(participantMap.keys());
+		const targetIds = this.layoutService.computeParticipantsToDisplay(availableIds);
 
-		if (!isLastSpeakersMode) {
-			// MOSAIC layout mode: show all participants
-			return remoteParticipants;
-		}
+		this.syncDisplayedParticipantsWithTarget(targetIds, availableIds);
 
-		// SMART_MOSAIC layout mode: show only active speakers
-		const activeSpeakersOrder = this.activeSpeakersOrder();
-		const maxSpeakers = this.layoutService.maxRemoteSpeakers();
-
-		// If no active speakers yet, initialize with first N remote participants
-		if (activeSpeakersOrder.length === 0) {
-			return remoteParticipants.slice(0, maxSpeakers);
-		}
-
-		// Build participants map for O(1) lookup
-		const participantsMap = new Map(remoteParticipants.map((p) => [p.identity, p]));
-
-		// Filter active speakers that still exist in remote participants
-		const validActiveSpeakers = activeSpeakersOrder
-			.map((identity) => participantsMap.get(identity))
-			.filter((p): p is CustomParticipantModel => p !== undefined)
-			.slice(-maxSpeakers); // Take last N speakers (most recent)
-
-		// If we have fewer active speakers than max, fill with additional participants
-		if (validActiveSpeakers.length < maxSpeakers) {
-			const activeSpeakerIdentities = new Set(validActiveSpeakers.map((p) => p.identity));
-			const additionalParticipants = remoteParticipants
-				.filter((p) => !activeSpeakerIdentities.has(p.identity))
-				.slice(0, maxSpeakers - validActiveSpeakers.length);
-
-			return [...validActiveSpeakers, ...additionalParticipants];
-		}
-
-		return validActiveSpeakers;
+		return this.displayedParticipantIds
+			.map((id) => participantMap.get(id))
+			.filter((p): p is CustomParticipantModel => p !== undefined);
 	});
 
 	constructor() {
-		effect(() => {
-			// Only setup active speakers if layout selector is enabled
-			if (this.showLayoutSelector() && this.meetingContextService.lkRoom()) {
-				this.setupActiveSpeakersListener();
-			}
-		});
-
-		// Effect to handle active speakers cleanup when participants leave
-		effect(() => {
-			// Skip if layout selector is disabled
-			if (!this.showLayoutSelector()) return;
-			if (!this.layoutService.isSmartMosaicEnabled()) return;
-
-			const remoteParticipants = this.meetingContextService.remoteParticipants();
-			const activeSpeakersOrder = this.activeSpeakersOrder();
-			const currentIdentities = new Set(remoteParticipants.map((p) => p.identity));
-			const cleanedOrder = activeSpeakersOrder.filter((identity) => currentIdentities.has(identity));
-
-			if (cleanedOrder.length !== activeSpeakersOrder.length) {
-				untracked(() => this.activeSpeakersOrder.set(cleanedOrder));
-			}
-		});
+		this.setupSpeakerTrackingEffect();
+		this.setupParticipantCleanupEffect();
 	}
 
 	protected onCopyMeetingLinkClicked(): void {
 		const room = this.meetingContextService.meetRoom();
 		if (!room) {
-			this.log.e('Cannot copy link: meeting room is undefined');
+			this.logger.e('Cannot copy link: meeting room is undefined');
 			return;
 		}
-
 		this.meetingService.copyMeetingSpeakerLink(room);
 	}
 
+	private isSmartMosaicActive(): boolean {
+		return this.isLayoutSwitchingAllowed() && this.layoutService.isSmartMosaicEnabled();
+	}
+
 	/**
-	 * Sets up the listener for active speakers changes from LiveKit
-	 * Uses efficient Set operations and early returns for performance
+	 * Synchronizes the list of displayed participants with the target set of participant IDs.
+	 * Ensures that only available participants are shown, replaces removed IDs with new ones
+	 * when possible, and appends any remaining participants needed to match the target state.
+	 * @param targetIds Set of participant IDs that should be displayed.
+	 * @param availableIds Set of participant IDs that are currently available for display.
 	 */
-	private setupActiveSpeakersListener(): void {
-		const room = this.openviduService.getRoom();
-		if (!room) {
-			this.log.e('Cannot setup active speakers listener: room is undefined');
-			return;
+
+	private syncDisplayedParticipantsWithTarget(targetIds: Set<string>, availableIds: Set<string>): void {
+		this.displayedParticipantIds = this.displayedParticipantIds.filter((id) => availableIds.has(id));
+
+		const currentDisplaySet = new Set(this.displayedParticipantIds);
+		const idsToRemove = this.displayedParticipantIds.filter((id) => !targetIds.has(id));
+		const idsToAdd = [...targetIds].filter((id) => !currentDisplaySet.has(id));
+
+		// Substitute removed with added at same positions
+		for (const removeId of idsToRemove) {
+			const addId = idsToAdd.shift();
+			if (addId) {
+				const index = this.displayedParticipantIds.indexOf(removeId);
+				if (index !== -1) this.displayedParticipantIds[index] = addId;
+			} else {
+				this.displayedParticipantIds = this.displayedParticipantIds.filter((id) => id !== removeId);
+			}
 		}
 
-		// Register cleanup on component destroy
-		this.destroyRef.onDestroy(() => {
-			room.off('activeSpeakersChanged', this.handleActiveSpeakersChanged);
+		// Append remaining
+		for (const addId of idsToAdd) {
+			if (this.displayedParticipantIds.length < targetIds.size) {
+				this.displayedParticipantIds.push(addId);
+			}
+		}
+	}
+
+	private setupSpeakerTrackingEffect(): void {
+		effect(() => {
+			const room = this.meetingContextService.lkRoom();
+			if (this.isLayoutSwitchingAllowed() && room) {
+				this.layoutService.initializeSpeakerTracking(room);
+			}
 		});
-
-		room.on('activeSpeakersChanged', this.handleActiveSpeakersChanged);
 	}
 
-	/**
-	 * Handles active speakers changed events from LiveKit
-	 */
-	private readonly handleActiveSpeakersChanged = (speakers: Participant[]): void => {
-		if (!this.layoutService.isSmartMosaicEnabled()) return;
+	private setupParticipantCleanupEffect(): void {
+		effect(() => {
+			if (!this.isSmartMosaicActive()) return;
 
-		const remoteSpeakers = speakers.filter((p) => !p.isLocal);
-		if (remoteSpeakers.length === 0) return;
-
-		const maxSpeakers = this.layoutService.maxRemoteSpeakers();
-		const newSpeakerIdentities = remoteSpeakers.map((p) => p.identity).slice(0, maxSpeakers);
-
-		if (this.isSameSpeakersList(newSpeakerIdentities)) return;
-
-		this.updateActiveSpeakersOrder(newSpeakerIdentities);
-	};
-
-	/**
-	 * Checks if the new speakers list is identical to the current one
-	 */
-	private isSameSpeakersList(newIdentities: string[]): boolean {
-		const currentOrder = this.activeSpeakersOrder();
-		const maxSpeakers = this.layoutService.maxRemoteSpeakers();
-		const currentActiveIdentities = currentOrder.slice(-maxSpeakers);
-
-		return (
-			currentActiveIdentities.length === newIdentities.length &&
-			currentActiveIdentities.every((identity, index) => identity === newIdentities[index])
-		);
-	}
-
-	/**
-	 * Updates the active speakers order with new speakers
-	 */
-	private updateActiveSpeakersOrder(newSpeakerIdentities: string[]): void {
-		const currentOrder = this.activeSpeakersOrder();
-		const newIdentitiesSet = new Set(newSpeakerIdentities);
-		const filteredOrder = currentOrder.filter((identity) => !newIdentitiesSet.has(identity));
-		const updatedOrder = [...filteredOrder, ...newSpeakerIdentities];
-		const maxSpeakers = this.layoutService.maxRemoteSpeakers();
-		const trimmedOrder = updatedOrder.slice(-(maxSpeakers * 2));
-
-		this.activeSpeakersOrder.set(trimmedOrder);
+			const currentIds = new Set(this.meetingContextService.remoteParticipants().map((p) => p.identity));
+			untracked(() => this.layoutService.removeDisconnectedSpeakers(currentIds));
+		});
 	}
 }
diff --git a/meet-ce/frontend/projects/shared-meet-components/src/lib/customization/components/meeting-settings-extensions/meeting-settings-extensions.component.html b/meet-ce/frontend/projects/shared-meet-components/src/lib/customization/components/meeting-settings-extensions/meeting-settings-extensions.component.html
index 79671cb5..42a71643 100644
--- a/meet-ce/frontend/projects/shared-meet-components/src/lib/customization/components/meeting-settings-extensions/meeting-settings-extensions.component.html
+++ b/meet-ce/frontend/projects/shared-meet-components/src/lib/customization/components/meeting-settings-extensions/meeting-settings-extensions.component.html
@@ -1,5 +1,5 @@
 <!-- Grid Layout Configuration Section -->
-@if (showLayoutSelector()) {
+@if (isLayoutSwitchingAllowed()) {
 	<div class="layout-section">
 		<div class="section-header">
 			<mat-icon class="section-icon material-symbols-outlined">browse</mat-icon>
@@ -14,14 +14,14 @@
 				(ngModelChange)="onLayoutModeChange($event)"
 				aria-label="Select layout mode"
 			>
-				<mat-radio-button [value]="LayoutMode.MOSAIC" class="layout-radio-option">
+				<mat-radio-button [value]="LayoutMode.MOSAIC" id="layout-mosaic" class="layout-radio-option">
 					<div class="radio-content">
 						<span class="radio-label">Mosaic</span>
 						<span class="radio-description">Shows all participants in a unified grid</span>
 					</div>
 				</mat-radio-button>
 
-				<mat-radio-button [value]="LayoutMode.SMART_MOSAIC" class="layout-radio-option">
+				<mat-radio-button [value]="LayoutMode.SMART_MOSAIC" id="layout-smart-mosaic" class="layout-radio-option">
 					<div class="radio-content">
 						<span class="radio-label">Smart Mosaic</span>
 						<span class="radio-description">Shows a limited number of active participants</span>
diff --git a/meet-ce/frontend/projects/shared-meet-components/src/lib/customization/components/meeting-settings-extensions/meeting-settings-extensions.component.ts b/meet-ce/frontend/projects/shared-meet-components/src/lib/customization/components/meeting-settings-extensions/meeting-settings-extensions.component.ts
index 5a8686f2..82ec070a 100644
--- a/meet-ce/frontend/projects/shared-meet-components/src/lib/customization/components/meeting-settings-extensions/meeting-settings-extensions.component.ts
+++ b/meet-ce/frontend/projects/shared-meet-components/src/lib/customization/components/meeting-settings-extensions/meeting-settings-extensions.component.ts
@@ -39,9 +39,9 @@ export class MeetingSettingsExtensionsComponent {
 	readonly LayoutMode = MeetLayoutMode;
 
 	/**
-	 * Whether the layout selector feature is enabled
+	 * Whether the layout switching feature is allowed
 	 */
-	protected readonly showLayoutSelector = this.meetingContextService.showLayoutSelector;
+	protected readonly isLayoutSwitchingAllowed = this.meetingContextService.allowLayoutSwitching;
 
 	/**
 	 * Current layout mode
diff --git a/meet-ce/frontend/projects/shared-meet-components/src/lib/customization/components/meeting-toolbar-more-options-menu/meeting-toolbar-more-options-menu.component.html b/meet-ce/frontend/projects/shared-meet-components/src/lib/customization/components/meeting-toolbar-more-options-menu/meeting-toolbar-more-options-menu.component.html
index 9362d6c8..84f72c3d 100644
--- a/meet-ce/frontend/projects/shared-meet-components/src/lib/customization/components/meeting-toolbar-more-options-menu/meeting-toolbar-more-options-menu.component.html
+++ b/meet-ce/frontend/projects/shared-meet-components/src/lib/customization/components/meeting-toolbar-more-options-menu/meeting-toolbar-more-options-menu.component.html
@@ -1,5 +1,5 @@
 <!-- Grid Layout Settings Button -->
-@if (showLayoutSelector()) {
+@if (isLayoutSwitchingAllowed()) {
 	<button
 		mat-menu-item
 		id="grid-layout-settings-btn"
diff --git a/meet-ce/frontend/projects/shared-meet-components/src/lib/customization/components/meeting-toolbar-more-options-menu/meeting-toolbar-more-options-menu.component.ts b/meet-ce/frontend/projects/shared-meet-components/src/lib/customization/components/meeting-toolbar-more-options-menu/meeting-toolbar-more-options-menu.component.ts
index 41ea5c25..25c235d3 100644
--- a/meet-ce/frontend/projects/shared-meet-components/src/lib/customization/components/meeting-toolbar-more-options-menu/meeting-toolbar-more-options-menu.component.ts
+++ b/meet-ce/frontend/projects/shared-meet-components/src/lib/customization/components/meeting-toolbar-more-options-menu/meeting-toolbar-more-options-menu.component.ts
@@ -50,9 +50,9 @@ export class MeetingToolbarMoreOptionsMenuComponent {
   readonly isDesktopView = computed(() => this.viewportService.isDesktop());
 
   /**
-   * Whether the layout selector feature is enabled
+   * Whether the layout switching feature is allowed
    */
-  readonly showLayoutSelector = computed(() => this.meetingContextService.showLayoutSelector());
+  readonly isLayoutSwitchingAllowed = computed(() => this.meetingContextService.allowLayoutSwitching());
 
   /**
    * Opens the settings panel to allow users to change grid layout
diff --git a/meet-ce/frontend/projects/shared-meet-components/src/lib/models/app.model.ts b/meet-ce/frontend/projects/shared-meet-components/src/lib/models/app.model.ts
index dd472802..e5d848e9 100644
--- a/meet-ce/frontend/projects/shared-meet-components/src/lib/models/app.model.ts
+++ b/meet-ce/frontend/projects/shared-meet-components/src/lib/models/app.model.ts
@@ -1,3 +1,5 @@
+import { MeetRoomTheme } from '@openvidu-meet/typings';
+
 export interface AppData {
 	mode: ApplicationMode;
 	edition: Edition;
@@ -13,3 +15,34 @@ export enum Edition {
 	CE = 'CE',
 	PRO = 'PRO'
 }
+
+/**
+ * Interface that defines all available features in the application
+ */
+export interface ApplicationFeatures {
+	// Media Features
+	videoEnabled: boolean;
+	audioEnabled: boolean;
+	showCamera: boolean;
+	showMicrophone: boolean;
+	showScreenShare: boolean;
+
+	// UI Features
+	showRecordingPanel: boolean;
+	showChat: boolean;
+	showBackgrounds: boolean;
+	showParticipantList: boolean;
+	showSettings: boolean;
+	showFullscreen: boolean;
+	showThemeSelector: boolean;
+	allowLayoutSwitching: boolean; // flag for allowing smart layout. It's changed manually.
+
+	// Permissions
+	canModerateRoom: boolean;
+	canRecordRoom: boolean;
+	canRetrieveRecordings: boolean;
+
+	// Appearance
+	hasCustomTheme: boolean;
+	themeConfig?: MeetRoomTheme;
+}
diff --git a/meet-ce/frontend/projects/shared-meet-components/src/lib/pages/meeting/meeting.component.ts b/meet-ce/frontend/projects/shared-meet-components/src/lib/pages/meeting/meeting.component.ts
index 148709cb..4949ffe1 100644
--- a/meet-ce/frontend/projects/shared-meet-components/src/lib/pages/meeting/meeting.component.ts
+++ b/meet-ce/frontend/projects/shared-meet-components/src/lib/pages/meeting/meeting.component.ts
@@ -15,7 +15,6 @@ import {
 import { Subject } from 'rxjs';
 import { MeetingParticipantItemComponent } from '../../customization';
 import {
-	ApplicationFeatures,
 	FeatureConfigurationService,
 	GlobalConfigService,
 	MeetingContextService,
@@ -27,6 +26,7 @@ import {
 	WebComponentManagerService
 } from '../../services';
 import { MeetingLobbyComponent } from '../../components/meeting-lobby/meeting-lobby.component';
+import { ApplicationFeatures } from '../../models/app.model';
 
 @Component({
 	selector: 'ov-meeting',
diff --git a/meet-ce/frontend/projects/shared-meet-components/src/lib/services/feature-configuration.service.ts b/meet-ce/frontend/projects/shared-meet-components/src/lib/services/feature-configuration.service.ts
index ab787e19..a83af6a3 100644
--- a/meet-ce/frontend/projects/shared-meet-components/src/lib/services/feature-configuration.service.ts
+++ b/meet-ce/frontend/projects/shared-meet-components/src/lib/services/feature-configuration.service.ts
@@ -4,41 +4,10 @@ import {
 	MeetRoomConfig,
 	MeetRoomMemberPermissions,
 	MeetRoomMemberRole,
-	MeetRoomTheme,
 	TrackSource
 } from '@openvidu-meet/typings';
 import { LoggerService } from 'openvidu-components-angular';
-
-/**
- * Interface that defines all available features in the application
- */
-export interface ApplicationFeatures {
-	// Media Features
-	videoEnabled: boolean;
-	audioEnabled: boolean;
-	showCamera: boolean;
-	showMicrophone: boolean;
-	showScreenShare: boolean;
-
-	// UI Features
-	showRecordingPanel: boolean;
-	showChat: boolean;
-	showBackgrounds: boolean;
-	showParticipantList: boolean;
-	showSettings: boolean;
-	showFullscreen: boolean;
-	showThemeSelector: boolean;
-	showLayoutSelector: boolean;
-
-	// Permissions
-	canModerateRoom: boolean;
-	canRecordRoom: boolean;
-	canRetrieveRecordings: boolean;
-
-	// Appearance
-	hasCustomTheme: boolean;
-	themeConfig?: MeetRoomTheme;
-}
+import { ApplicationFeatures } from '../models/app.model';
 
 /**
  * Base configuration for default features
@@ -57,7 +26,7 @@ const DEFAULT_FEATURES: ApplicationFeatures = {
 	showSettings: true,
 	showFullscreen: true,
 	showThemeSelector: true,
-	showLayoutSelector: true, // flag for allowing smart layout. It's changed manually.
+	allowLayoutSwitching: true,
 
 	canModerateRoom: false,
 	canRecordRoom: false,
diff --git a/meet-ce/frontend/projects/shared-meet-components/src/lib/services/layout.service.ts b/meet-ce/frontend/projects/shared-meet-components/src/lib/services/layout.service.ts
index b8111f29..249ee8e6 100644
--- a/meet-ce/frontend/projects/shared-meet-components/src/lib/services/layout.service.ts
+++ b/meet-ce/frontend/projects/shared-meet-components/src/lib/services/layout.service.ts
@@ -1,31 +1,33 @@
-import { Injectable, signal, computed, effect } from '@angular/core';
+import { Injectable, signal, computed, effect, DestroyRef, inject } from '@angular/core';
+import { Room, Participant } from 'livekit-client';
 import { LayoutService, LoggerService, ViewportService } from 'openvidu-components-angular';
 import { MeetLayoutMode } from '../models/layout.model';
 import { MeetStorageService } from './storage.service';
 
-@Injectable({
-	providedIn: 'root'
-})
+@Injectable({ providedIn: 'root' })
 export class MeetLayoutService extends LayoutService {
-	private readonly DEFAULT_SMART_MOSAIC_SPEAKERS = 4;
+	private readonly destroyRef = inject(DestroyRef);
+
+	private readonly DEFAULT_MAX_SPEAKERS = 4;
 	private readonly DEFAULT_LAYOUT_MODE = MeetLayoutMode.MOSAIC;
 
-	/** Minimum number of remote speakers that can be displayed when Smart Mosaic layout is enabled */
 	readonly MIN_REMOTE_SPEAKERS = 1;
-	/** Maximum number of remote speakers that can be displayed when Smart Mosaic layout is enabled */
 	readonly MAX_REMOTE_SPEAKERS_LIMIT = 6;
 
 	private readonly _layoutMode = signal<MeetLayoutMode>(MeetLayoutMode.MOSAIC);
 	readonly layoutMode = this._layoutMode.asReadonly();
-	private readonly _maxRemoteSpeakers = signal<number>(this.DEFAULT_SMART_MOSAIC_SPEAKERS);
+
+	private readonly _maxRemoteSpeakers = signal<number>(this.DEFAULT_MAX_SPEAKERS);
 	readonly maxRemoteSpeakers = this._maxRemoteSpeakers.asReadonly();
 
-	/**
-	 * Computed signal that checks if Smart Mosaic layout is enabled
-	 * This is automatically recomputed when layoutMode changes
-	 */
 	readonly isSmartMosaicEnabled = computed(() => this._layoutMode() === MeetLayoutMode.SMART_MOSAIC);
 
+	private readonly _speakerRecencyOrder = signal<string[]>([]);
+	readonly speakerRecencyOrder = this._speakerRecencyOrder.asReadonly();
+
+	private currentRoom: Room | null = null;
+	private isSpeakerTrackingActive = false;
+
 	constructor(
 		protected loggerService: LoggerService,
 		protected viewPortService: ViewportService,
@@ -34,128 +36,124 @@ export class MeetLayoutService extends LayoutService {
 		super(loggerService, viewPortService);
 		this.log = this.loggerService.get('MeetLayoutService');
 
-		this.initializeLayoutMode();
-		this.initializeMaxRemoteSpeakers();
-
-		// Effect to persist layout mode changes to storage
-		effect(() => {
-			const mode = this._layoutMode();
-			this.storageService.setLayoutMode(mode);
-			this.log.d(`Layout mode persisted to storage: ${mode}`);
-		});
-
-		// Effect to persist max remote speakers changes to storage
-		effect(() => {
-			const count = this._maxRemoteSpeakers();
-			this.storageService.setMaxRemoteSpeakers(count);
-			this.log.d(`Max remote speakers persisted to storage: ${count}`);
-		});
+		this.loadLayoutModeFromStorage();
+		this.loadMaxSpeakersFromStorage();
+		this.setupStoragePersistence();
 	}
 
-	/**
-	 * Initializes the layout mode for the application.
-	 * Retrieves the layout mode from storage or defaults to MOSAIC.
-	 */
-	private initializeLayoutMode(): void {
-		const layoutMode = this.storageService.getLayoutMode();
-		if (layoutMode && Object.values(MeetLayoutMode).includes(layoutMode)) {
-			this._layoutMode.set(layoutMode);
-		} else {
-			this._layoutMode.set(this.DEFAULT_LAYOUT_MODE);
-		}
-		this.log.d(`Layout mode initialized: ${this._layoutMode()}`);
+	private loadLayoutModeFromStorage(): void {
+		const storedMode = this.storageService.getLayoutMode();
+		const isValidMode = storedMode && Object.values(MeetLayoutMode).includes(storedMode);
+		this._layoutMode.set(isValidMode ? storedMode : this.DEFAULT_LAYOUT_MODE);
 	}
 
-	/**
-	 * Initializes the max remote speakers count from storage.
-	 */
-	private initializeMaxRemoteSpeakers(): void {
-		const count = this.storageService.getMaxRemoteSpeakers();
-		if (count && count >= this.MIN_REMOTE_SPEAKERS && count <= this.MAX_REMOTE_SPEAKERS_LIMIT) {
-			this._maxRemoteSpeakers.set(count);
-		} else {
-			this._maxRemoteSpeakers.set(this.DEFAULT_SMART_MOSAIC_SPEAKERS);
-		}
-		this.log.d(`Max remote speakers initialized: ${this._maxRemoteSpeakers()}`);
+	private loadMaxSpeakersFromStorage(): void {
+		const storedCount = this.storageService.getMaxRemoteSpeakers();
+		const isValidCount =
+			storedCount && storedCount >= this.MIN_REMOTE_SPEAKERS && storedCount <= this.MAX_REMOTE_SPEAKERS_LIMIT;
+		this._maxRemoteSpeakers.set(isValidCount ? storedCount : this.DEFAULT_MAX_SPEAKERS);
 	}
 
-	/**
-	 * Checks if the current layout mode is set to display the last speakers.
-	 * @deprecated Use isSmartMosaicEnabled computed signal instead
-	 * @returns {boolean} `true` if the layout mode is set to `SMART_MOSAIC`, otherwise `false`.
-	 */
-	isLastSpeakersLayoutEnabled(): boolean {
-		return this._layoutMode() === MeetLayoutMode.SMART_MOSAIC;
+	private setupStoragePersistence(): void {
+		effect(() => this.storageService.setLayoutMode(this._layoutMode()));
+		effect(() => this.storageService.setMaxRemoteSpeakers(this._maxRemoteSpeakers()));
 	}
 
-	/**
-	 * Sets the layout mode and triggers layout update.
-	 * This method validates the mode and only updates if it's different.
-	 *
-	 * @param layoutMode - The new layout mode to set
-	 */
-	setLayoutMode(layoutMode: MeetLayoutMode): void {
-		const currentMode = this._layoutMode();
-		const isValidMode = Object.values(MeetLayoutMode).includes(layoutMode);
-
-		if (!isValidMode) {
-			this.log.w(`Invalid layout mode: ${layoutMode}`);
+	setLayoutMode(mode: MeetLayoutMode): void {
+		if (!Object.values(MeetLayoutMode).includes(mode)) {
+			this.log.w(`Invalid layout mode: ${mode}`);
 			return;
 		}
+		if (this._layoutMode() === mode) return;
 
-		if (currentMode === layoutMode) {
-			this.log.d(`Layout mode already set to: ${layoutMode}`);
-			return;
-		}
-
-		this.log.d(`Layout mode updated from ${currentMode} to ${layoutMode}`);
-		this._layoutMode.set(layoutMode);
+		this._layoutMode.set(mode);
 		this.update();
 	}
 
-	/**
-	 * Sets the maximum number of remote speakers to display in Smart Mosaic mode.
-	 * Validates the count is between the default minimum and the default maximum.
-	 *
-	 * @param count - Number of remote participants to display (default minimum to default maximum)
-	 */
 	setMaxRemoteSpeakers(count: number): void {
 		if (count < this.MIN_REMOTE_SPEAKERS || count > this.MAX_REMOTE_SPEAKERS_LIMIT) {
 			this.log.w(
-				`Invalid max remote speakers count: ${count}. Must be between ${this.MIN_REMOTE_SPEAKERS} and ${this.MAX_REMOTE_SPEAKERS_LIMIT}`
+				`Invalid speaker count: ${count}. Range: ${this.MIN_REMOTE_SPEAKERS}-${this.MAX_REMOTE_SPEAKERS_LIMIT}`
 			);
 			return;
 		}
+		if (this._maxRemoteSpeakers() === count) return;
 
-		const currentCount = this._maxRemoteSpeakers();
-		if (currentCount === count) {
-			this.log.d(`Max remote speakers already set to: ${count}`);
-			return;
-		}
-
-		this.log.d(`Max remote speakers updated from ${currentCount} to ${count}`);
 		this._maxRemoteSpeakers.set(count);
+		if (this.isSmartMosaicEnabled()) this.update();
+	}
 
-		// Trigger layout update if in Smart Mosaic mode
-		if (this.isSmartMosaicEnabled()) {
-			this.update();
+	initializeSpeakerTracking(room: Room): void {
+		if (this.isSpeakerTrackingActive) return;
+
+		this.currentRoom = room;
+		this.isSpeakerTrackingActive = true;
+		room.on('activeSpeakersChanged', this.handleActiveSpeakersChanged);
+
+		this.destroyRef.onDestroy(() => this.cleanupSpeakerTracking());
+	}
+
+	cleanupSpeakerTracking(): void {
+		this.currentRoom?.off('activeSpeakersChanged', this.handleActiveSpeakersChanged);
+		this.currentRoom = null;
+		this._speakerRecencyOrder.set([]);
+		this.isSpeakerTrackingActive = false;
+	}
+
+	/**
+	 * Removes participant IDs from the speaker recency order that are not in the set of connected participants.
+	 * @param connectedParticipantIds Set of participant IDs that are currently connected.
+	 */
+	removeDisconnectedSpeakers(connectedParticipantIds: Set<string>): void {
+		const currentOrder = this._speakerRecencyOrder();
+		const filteredOrder = currentOrder.filter((id) => connectedParticipantIds.has(id));
+
+		if (filteredOrder.length !== currentOrder.length) {
+			this._speakerRecencyOrder.set(filteredOrder);
 		}
 	}
 
 	/**
-	 * Gets the current layout mode.
-	 * @deprecated Use layoutMode signal directly instead
-	 * @returns {MeetLayoutMode} The current layout mode
+	 * Determines the set of participant IDs to display by prioritizing the most
+	 * recent speakers and filling remaining slots with other available participants.
+	 * Ensures the result does not exceed the maximum number of remote speakers.
+	 * @param availableIds Set of participant IDs currently available for selection.
+	 * @returns Set of participant IDs selected for display.
 	 */
-	getLayoutMode(): MeetLayoutMode {
-		return this._layoutMode();
+	computeParticipantsToDisplay(availableIds: Set<string>): Set<string> {
+		const maxCount = this._maxRemoteSpeakers();
+		const speakerOrder = this._speakerRecencyOrder();
+
+		const recentSpeakers = speakerOrder.filter((id) => availableIds.has(id)).slice(-maxCount);
+
+		if (recentSpeakers.length >= maxCount) {
+			return new Set(recentSpeakers);
+		}
+
+		const recentSpeakerSet = new Set(recentSpeakers);
+		const fillersNeeded = maxCount - recentSpeakers.length;
+		const fillers = [...availableIds].filter((id) => !recentSpeakerSet.has(id)).slice(0, fillersNeeded);
+
+		return new Set([...recentSpeakers, ...fillers]);
 	}
 
-	/**
-	 * Gets the current max remote speakers count.
-	 * @returns {number} The current max remote speakers count
-	 */
-	getMaxRemoteSpeakers(): number {
-		return this._maxRemoteSpeakers();
+	private readonly handleActiveSpeakersChanged = (speakers: Participant[]): void => {
+		if (!this.isSmartMosaicEnabled()) return;
+
+		const remoteSpeakerIds = speakers.filter((p) => !p.isLocal).map((p) => p.identity);
+		if (remoteSpeakerIds.length > 0) {
+			this.updateSpeakerRecency(remoteSpeakerIds);
+		}
+	};
+
+	private updateSpeakerRecency(newSpeakerIds: string[]): void {
+		const newSpeakerSet = new Set(newSpeakerIds);
+		const currentOrder = this._speakerRecencyOrder();
+
+		const withoutNewSpeakers = currentOrder.filter((id) => !newSpeakerSet.has(id));
+		const updatedOrder = [...withoutNewSpeakers, ...newSpeakerIds];
+
+		const maxHistorySize = this._maxRemoteSpeakers() * 2;
+		this._speakerRecencyOrder.set(updatedOrder.slice(-maxHistorySize));
 	}
 }
diff --git a/meet-ce/frontend/projects/shared-meet-components/src/lib/services/meeting/meeting-context.service.ts b/meet-ce/frontend/projects/shared-meet-components/src/lib/services/meeting/meeting-context.service.ts
index ed63f1e3..649224ae 100644
--- a/meet-ce/frontend/projects/shared-meet-components/src/lib/services/meeting/meeting-context.service.ts
+++ b/meet-ce/frontend/projects/shared-meet-components/src/lib/services/meeting/meeting-context.service.ts
@@ -102,9 +102,9 @@ export class MeetingContextService {
 	readonly canModerateRoom = computed(() => this.featureConfigService.features().canModerateRoom);
 
 	/**
-	 * Computed signal for whether the layout selector feature is enabled
+	 * Computed signal for whether layout switching is allowed
 	 */
-	readonly showLayoutSelector = computed(() => this.featureConfigService.features().showLayoutSelector);
+	readonly allowLayoutSwitching = computed(() => this.featureConfigService.features().allowLayoutSwitching);
 
 	/**
 	 * Computed signal for whether the device is mobile