iRobot to cut down 31% of its workforce
It will lay off 350 employees after Amazon terminates acquisition deal
image for illustrative purpose
iRobot in Rejig Mode
- Founder and CEO, Colin Angle, would also step down
- It resulted after Amazon-iRobot $1.7 bn deal mutually terminated
- Shares of iRobot fell 10 per cent after the deal termination
- iRobot expects to restructure between $12 mn and $13 mn charges
San Francisco: iRobot, which makes consumer robots, has announced to lay off around 350 employees -- about 31 per cent of its workforce -- and its founder and CEO, Colin Angle, would also step down.
The layoffs came after the Amazon-iRobot $1.7 billion deal was mutually terminated over regulatory hurdles. Shares of iRobot fell 10 per cent after the deal termination news.
As part of this workforce reduction, iRobot expects to record restructuring charges between $12 million and $13 million, primarily for severance and related costs, over the first two quarters of 2024, with the majority of the restructuring charges anticipated in the first quarter of 2024.
"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," said Andrew Miller, Chairman of the iRobot Board.
Glen Weinstein, iRobot's Executive Vice President and Chief Legal Officer, has been appointed Interim CEO, and Miller has been appointed Chairman of the Board. iRobot anticipates reporting full-year 2023 revenue of $891 million, a 25 per cent reduction as compared to the same period last year. Under the terms of the merger agreement, Amazon will pay iRobot a $94 million termination fee.
After payment of financial advisor fees of approximately 20 per cent of the termination fee, the company shall apply $35 million dollars of the termination fee immediately to repay the term loan, and the remainder of the termination fee will be set aside to be used for future repayments of the term loan. "We are disappointed with the Company's 2023 performance - but our focus turns now to the future," said Miller.
