Amazon Ends iRobot Deal, Forces Roomba Maker to Cut 31% of Staff

On Monday, Amazon announced that it will not proceed with the planned acquisition of vacuum-maker iRobot, citing “no path to regulatory approval for the deal.” This decision came as a result of uncertainty surrounding regulatory approval, particularly from the European Union.

iRobot, the Roomba maker, also revealed significant changes, including the layoff of 31% of its employees (around 350 people) and the immediate departure of its chair and CEO, Colin Angle. The company’s shares fell by 10% in morning trading following the news.

The fate of the acquisition became unclear after reports from The Wall Street Journal suggested that the European Union would not grant regulatory approval. The European Commission had initiated an investigation, expressing concerns that the deal could allow Amazon to hinder iRobot’s rivals from competing on Amazon’s online marketplace. The Commission believed that Amazon’s control could lead to reduced competition, higher prices, lower quality, and less innovation in the robot vacuum cleaner market.

Amazon, expressing disappointment over the deal’s termination, will pay iRobot a previously agreed-upon $94 million breakup fee. The deal, initially announced in 2022, would have originally valued iRobot at around $1.7 billion.

Following the development, iRobot plans to focus on margin improvements, reduce spending on research and development, and pause work on “non-floorcare” products, including air purifiers and robotic lawn mowers.

Regulators worldwide have increased scrutiny on large technology companies, and Amazon is also part of an FTC inquiry into investments and partnerships between Big Tech and artificial intelligence developers. In Europe, regulatory bodies have delayed or halted several deals, including Meta’s acquisition of Giphy, Adobe’s terminated acquisition of Figma, Microsoft’s investment in OpenAI, and Microsoft’s purchase of Activision Blizzard.

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