Amazon and iRobot have mutually agreed to terminate their acquisition agreement, which was originally signed on August 4, 2022. The cancelled deal would have involved Amazon acquiring iRobot for a cash consideration, aiming to enable further innovation by iRobot and to help lower prices on products for consumers.
Colin Angle, Founder of iRobot, expressed disappointment regarding the termination of the agreement but affirmed iRobot’s dedication to continuing the development of robots and home innovations.
Following the termination of the merger, iRobot announced an operational restructuring plan to stabilize the company in the current market, focus on profitability, and pursue growth initiatives to increase market share in the mid-tier and premium segments. This plan includes financial strategies and cost-saving measures. In conjunction with this restructuring, Colin Angle has stepped down as Chairman and CEO of iRobot. Glen Weinstein, Executive Vice President and Chief Legal Officer at iRobot, has been appointed Interim CEO, and Andrew Miller, the lead independent director of the Board, has taken over as Chairman of the Board.
iRobot’s restructuring plan entails margin improvements, cost reductions in goods sold, a decrease in R&D expenses by offshoring non-core engineering functions, centralization of global marketing activities, and rightsizing the global real estate footprint. The company will also halt work on non-floorcare innovations, including air purification, robotic lawn mowing, and education. These actions will result in the reduction of approximately 350 employees, which is 31 percent of the workforce, with the majority of notifications expected by March 30, 2024.
iRobot anticipates restructuring charges between $12 million and $13 million, mainly for severance and related costs, which will be recorded over the first half of 2024. Jeff Engel, a turnaround expert, has been appointed Chief Restructuring Officer to oversee and implement the operational restructuring plan, reporting directly to the Board and Mr. Weinstein.
