The company that makes Roombas recently declared that it is letting go of 31% of its workforce.
In a recent announcement, Amazon and iRobot, the company that manufactures the Roomba vacuum series, stated that they would be abandoning their proposed merger. An announcement regarding the possible acquisition was made in August of 2022, and antitrust watchdogs, particularly those in the European Union, instantly became interested in the proposal. In July of last year, the European Commission, which is the executive part of the European Union, made an official announcement that it was investigating the $1.4 billion dollar agreement. In November, the European Commission expressed formal concerns regarding the potential impact on competition.
Since the deal is not going through, iRobot has also recently revealed that it will be laying off a significant number of employees. The corporation has announced that it will be terminating around 350 employees, which is equivalent to thirty-one percent of iRobot’s staff. With immediate effect, Colin Angle, who founded iRobot and currently serves as the company’s chairman of the board of directors and CEO, is resigning from his positions as chairman and CEO.
Bloomberg writes that a veto appeared to be likely, despite the fact that the corporations did not expressly identify the pressure from the EU. Furthermore, despite the fact that this may not have instantly put an end to the transaction, it seems that Amazon and iRobot have made the decision to fully halt all operations rather than work through any recommended modifications that would make the transaction more acceptable to the authorities. It was also reported that the Federal Trade Commission (FTC) in the United States was looking into the agreement, although it never quite reached the amount of attention that it was receiving from the European Union (EU).
The statement that Amazon has released regarding the matter, which is not surprise, criticizes the authorities for the “innovation” that would result from Amazon acquiring yet another company. In a statement, Amazon Senior Vice President and General Counsel David Zapolsky said, “This outcome will deny consumers faster innovation and more competitive prices, which we are confident would have made their lives easier and more enjoyable.” Zapolsky was writing about the consequences of this outcome. “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.”
The statement made by iRobot was more subdued. “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,” stated Colin Angle, the company’s former CEO.
At an earlier point in the month of January, it was reported that the European Commission had cautioned Amazon that the transaction was precarious. On the other hand, Reuters reports that the corporation did not provide any feasible solutions to alleviate the worries that the bloc had regarding the acquisition. iRobot is being compensated by Amazon with a termination fee of $94 million, as stipulated in the original agreement, now that the purchase has been concluded.
It is not precisely the first time that Amazon and the European Union have battled with one another. They had a disagreement in the past with the manner in which the company handled information regarding third-party sellers. In the year 2022, the two parties came to an agreement over the manner in which Amazon deals with third-party retailers.