Big Layoffs at Roomba After Amazon Deal Falls Through

Companies say the planned acquisition is off
By Jenn Gidman,  Newser Staff
Posted Aug 5, 2022 2:26 PM CDT
Updated Jan 29, 2024 9:36 AM CST
Amazon Is Sucking Up Roomba's Maker
A Roomba 980 vacuum cleaning robot is presented during a presentation in Tokyo on Sept. 29, 2015.   (AP Photo/Eugene Hoshiko)
UPDATE Jan 29, 2024 9:36 AM CST

Amazon and Roomba won't be getting together after all. The retail giant and vacuum maker iRobot said Monday that Amazon's planned acquisition is off, reports the Wall Street Journal. The deal had faced big regulatory hurdles in Europe and the US. Amazon will pay the Massachusetts company a $94 million termination fee, while iRobot said it would now lay off 350 workers, about 31% of the company. As part of that restructuring. CEO Colin Angle also is stepping down.

Aug 5, 2022 2:26 PM CDT

You'll soon have one more thing to be forced to thank Amazon for: a cleaner home. That's because the retail giant is set to buy iRobot Corp., the company that makes Roomba vacuum cleaners, as well as other robotic tidying-up products like mops and lawn mowers. CNBC reports that Amazon agreed to pony up $61 a share, or $1.7 billion in total, in the all-cash deal, which will boost Amazon's smart-home portfolio of products such as Ring camera doorbells, Alexa virtual-assistant speakers, and voice-activated microwaves and thermometers.

Despite a sales surge of Roomba vacuums, which debuted in 2002, during the earlier part of the pandemic when more people were stuck at home, revenue for this year's second quarter came in at $255.4 million—a far cry from the $303 million that analysts had anticipated. iRobot says these results can be attributed to a drop-off in orders, supply chain issues, and a stronger dollar, reports the Wall Street Journal. The firm also notes that it will be laying off about 140 of its employees, the equivalent of 10% of its workforce.

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Over at the Verge, Jennifer Pattison Tuohy takes a look at the bigger picture behind why Amazon may have been interested in acquiring the company that makes robot vacuums. Basically, she writes, because Roombas have the capability to map out and gather intel on your residence's floor plans, "Amazon bought iRobot to see inside your home." She sees this merger, along with Amazon's existing smart products, as a way for the company to get "a pretty complete picture of your daily life" and set up a comprehensive "ambient intelligence" home—which could raise eyebrows on privacy concerns. The founder of iRobot, Colin Angle, will remain at the helm of the company once the deal is approved by shareholders and regulators. (More stories.)

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