This week, iRobot Corp. and Amazon.com Inc. have mutually decided to call off their planned acquisition due to intense regulatory scrutiny, a decision made after initially agreeing to the deal on August 4, 2022. Initially, Amazon was set to purchase the robotic vacuum maker for up to $1.7 billion in cash, a figure adjusted to $1.42 billion following iRobot’s new debt and a 10% workforce reduction, impacting about 140 employees.
Despite this, iRobot has been active in its sector, launching new products and facing both challenges and advancements in regulatory and legal arenas. Notably, the U.S. Federal Trade Commission began investigating the acquisition, and a mixed outcome emerged from a patent-infringement lawsuit with SharkNinja. However, the U.K. Competition and Markets Authority cleared the acquisition, while the European Commission expressed concerns over competition.
Following the termination of the acquisition, iRobot will receive a $94 million termination fee from Amazon. Concurrently, iRobot announced significant leadership changes, including the departure of co-founder Colin Angle as chairman and CEO, with Glen Weinstein stepping in as interim CEO and Andrew Miller as the new chairman.
Financially, iRobot anticipates a substantial decrease in revenue for 2023, alongside operating losses, but remains focused on aligning its cost structure with revenue expectations to drive profitability. This includes a significant workforce reduction of 350 employees, or 31% of its staff, part of a broader restructuring to save costs across various departments and pause projects outside its core focus.
iRobot is set on returning to profitability through strategic initiatives such as margin improvements, cost reductions in research and development, marketing consolidation, and a focus on its most profitable products and markets, including a growing direct-to-consumer channel.
Here what the movers and shakers of the announcement had to say:
“We’re disappointed that Amazon’s acquisition of iRobot could not proceed,” said We’re believers in the future of consumer robotics in the home and have always been fans of iRobot’s products, which delight consumers and solve problems in ways that improve their lives. Amazon and iRobot were excited to see what our teams could build together, and we’re deeply grateful to everyone who worked tirelessly to try and make this collaboration a reality.
This outcome will deny consumers faster innovation and more competitive prices, which we’re confident would have made their lives easier and more enjoyable. Mergers and acquisitions like this help companies like iRobot better compete in the global marketplace, particularly against companies, and from countries, that aren’t subject to the same regulatory requirements in fast-moving technology segments like robotics.
Undue and disproportionate regulatory hurdles discourage entrepreneurs, who should be able to see acquisition as one path to success, and that hurts both consumers and competition — the very things that regulators say they’re trying to protect.”
— David Zapolsky, senior vice president and general counsel at Amazon
“iRobot is an innovation pioneer with a clear vision to make consumer robots a reality. The termination of the agreement with Amazon is disappointing, but iRobot now turns toward the future with a focus and commitment to continue building thoughtful robots and intelligent home innovations that make life better, and that our customers around the world love.
When I founded iRobot more than three decades ago, having more than 50 million of our products in homes worldwide was beyond my wildest imagination. I am incredibly proud of what our team has accomplished over the years. From the development of the first Roomba in 2002 to our latest generation, they have been relentless in building and delivering new and iconic ways for consumers to clean and live.
At the same time, I know there is a lot of work to do to map iRobot’s next chapter. Given the nature of the challenges facing the company, the board and I have mutually decided that iRobot will be better served by a new leader with turnaround experience. I would like to sincerely thank our team members around the world for their commitment to our mission of helping people do more.”
— iRobot Co-founder Colin Angle
“iRobot is a pioneer of the consumer robot field and beloved by its customers around the world. With a legacy of innovation and a foundation of creativity, 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.
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. We are confident that the actions we are announcing today will enable us to chart a new strategic path for sustainable value creation.
On behalf of the board, I would like to extend my sincerest gratitude to Colin for more than 33 years of leadership in building a company that has changed the world. I particularly appreciate Colin’s support of this transition. We are also grateful to Glen for stepping up to guide our company through this important period. As the search for our next CEO progresses, I know we will benefit from Glen’s deep knowledge of our business, having been an integral member of iRobot’s leadership team for over 20 years.”
— Andrew Miller, lead independent director of iRobot’s board, appointed chairman of the board
