iRobot shares restructuring plans following Amazon deal cancellation
MASSACHUSETTS, UNITED STATES — iRobot, the company behind the popular Roomba robot vacuum cleaner, announced a major restructuring plan that includes layoffs and offshoring after the cancellation of a takeover deal with e-commerce giant Amazon.
The company said that it will be laying off about 350 employees, or 31% of its workforce, by the end of March as part of an operational restructuring plan that will include the appointment of a new CEO and Chairman.
The canceled deal, announced in June 2022, was set to be worth $1.7 billion. However, it was called off due to regulatory challenges and concerns that competition could be hurt by other robot vacuum cleaning companies through an Amazon takeover.
The deal was also criticized by some lawmakers, who argued that it could lead to job losses and a loss of innovation in the industry.
The layoffs will affect employees across the company, including those in engineering, marketing, and other departments. iRobot has not yet announced which offices will be closed, but smaller and underperforming offices are expected also to be affected.
Concurrent with the implementation of its operational restructuring plan, the company also announced a leadership transition whereby Colin Angle, Chairman of the Board of Directors and CEO, has stepped down as Chairman and CEO.
Glen Weinstein, iRobot’s Executive Vice President and Chief Legal Officer, has been appointed Interim CEO, and Andrew Miller, lead independent director of the Board, has been appointed Chairman of the Board.
“The Board and I believe that iRobot can – and will – grow its presence and continue to build a cutting-edge suite of robotic floorcare solutions that help consumers make their homes easier to maintain and healthier places to live,” said Miller in a statement.
“To do this successfully, however, we must rapidly align our operating model and cost structure to our future as a standalone company. Though decisions that impact our people are difficult, we must move forward with a more sustainable business model and a renewed focus on profitability,“ he added.
The cancellation of the Amazon takeover deal is a significant setback for iRobot. The company had been struggling financially in recent years, with its preliminary Q4 2023 results showing a full-year revenue of just $891 million, down 25% from the same period last year.
The deal was seen as a way to inject new life into the company. However, the regulatory challenges and concerns about competition were too great to overcome.
