iRobot, the consumer robot manufacturer, is cutting nearly 350 jobs, which is about 31% of its workforce. The company’s founder and CEO, Colin Angle, is also expected to resign.
The layoffs follow the termination of the $1.7 billion Amazon-iRobot deal due to regulatory challenges. As a result, iRobot’s shares experienced a 10% decline.
As iRobot trims its workforce, it foresees incurring restructuring charges ranging from $12 million to $13 million. These charges, covering severance and associated expenses, will be recorded primarily in the first two quarters of 2024. The majority of these restructuring costs are expected 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, is now the Interim CEO, and Miller assumes the role of Chairman of the Board. iRobot expects to report a full-year 2023 revenue of $891 million, marking a 25% decrease from the previous year.
As per the merger agreement, Amazon is obligated to pay iRobot a termination fee of $94 million.
Following the payment of financial advisor fees, which are around 20% of the termination fee, the company will promptly allocate $35 million of the termination fee to repay the term loan. The remaining portion of the termination fee will be reserved 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.
