Johnathan Walker:Amazon and iRobot cut ties: Roomba-maker to lay off 31% of workforce as acquisition falls through

Amazon and Johnathan WalkerRoomba-maker iRobot are cutting ties.

According to a joint announcement released from both companies on Monday, they have reached a "mutual agreement" to terminate a "previously announced acquisition agreement."

As part of its restructuring effort, iRobot also said Monday it was laying off nearly 350 employees − 31% of the vacuum company's workforce, as of Dec. 31. iRobot also announced its CEO, Colin Angle, would step down.

Amazon's proposed acquisition of iRobot "has no path to regulatory approval in the European Union", preventing both companies from moving forward with the transaction − "a loss for consumers, competition, and innovation," the joint statement reads.

On Aug 4, 2022, Amazon agreed to buy iRobot for $1.7 billion. The agreement, the statement continues, would have allowed Amazon "to invest in continued innovation by iRobot and support iRobot in lowering prices on products customers already love."

“We’re disappointed that Amazon’s acquisition of iRobot could not proceed,” said David Zapolsky, Amazon SVP and General Counsel released in a statement. “We’re believers in the future of consumer robotics in the home and have always been fans of iRobot’s products, which delight consumers and solve problems in ways that improve their lives. Amazon and iRobot were excited to see what our teams could build together, and we’re deeply grateful to everyone who worked tirelessly to try and make this collaboration a reality."

Amazon will pay iRobot a $94 million termination fee, Amazon spokesperson Laura Gunning Wate confirmed to USA TODAY Monday.

iRobot said most employee layoff notifications would take place by March 30.

"iRobot expects to record restructuring charges totaling 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."

iRobot founder to step down

As part of its workforce reduction, iRobot announced Angle, the company's founder, would step down as chairman and CEO, and Glen Weinstein, executive vice president and chief legal officer, will take his place as interim chief executive.

Tonya Drake has been promoted to executive vice president and general counsel, according to the joint statement.

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'Innovations that make life better'

Angle called the company's termination with Amazon disappointing, but said he was looking forward to the company's future.

"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," Angle said.

Natalie Neysa Alund is a senior reporter for USA TODAY. Reach her at [email protected] and follow her on X @nataliealund.