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IRobot discloses layoffs, plans to cut office space amid low sales and acquisition by Amazon

An iRobot Roomba is shown in a demo room at iRobot's offices in Bedford.Aram Boghosian for The Boston Globe

Bedford-based iRobot has laid off employees and plans to trim its real estate footprint in an effort to cut costs, as the maker of the Roomba vacuum faces declining revenue and a pending acquisition by Amazon.

The company said in a regulatory filing Thursday that it terminated about 100 employees, or 8 percent of its workforce, in August and eliminated a “number of open positions.” When iRobot originally announced the Amazon acquisition on Aug. 5, it hinted that future layoffs would affect about 10 percent of its workforce.

IRobot said it ended the third quarter with just over 1,300 employees. The company also said it would “resize” its global headquarters by the end of the year. The company expects its restructuring actions to generate about $30 million in cost savings next year, according to the filing.

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Amazon’s planned acquisition of iRobot was valued at about $1.7 billion. The companies did not offer a timeline for when the deal would close, but in September iRobot disclosed that the merger was being closely reviewed by the Federal Trade Commission.

In the meantime, iRobot’s business has been struggling.

IRobot said it has had a “long history of profitable operations,” a trend that was boosted during the first year of the pandemic as consumer demand “increased considerably.” But in the first nine months of 2022, the company’s revenue declined 26 percent compared to the same period last year.

The company cited high inflation, rising interest rates, recession fears, and geopolitical instability as reasons why consumers are spending less money on its products. As a result, iRobot has been losing money, totaling $156 million in operating losses for the first three quarters of the year.

At the same time, iRobot’s potential new owner is facing economic headwinds. Amazon chief executive Andy Jassy is leading a cost-cutting review at the company and “paring back” on unprofitable divisions, The Wall Street Journal reported Thursday. Last week, Amazon said it was freezing corporate hiring. It’s unclear how these moves might affect the acquisition of iRobot.

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A spokesperson for Amazon declined to comment, and iRobot did not respond to a request for comment.

IRobot also disclosed that it has borrowed $90 million from a $150 million revolving line of credit, which comes due in June 2023. At the end of last month, iRobot temporarily increased this credit agreement to $200 million, but it is in the process of extending the contract by two years.

To maintain its line of credit, iRobot plans to consider additional layoffs, further reductions in discretionary spending, and delaying the timing of payments to suppliers, among other things.


Anissa Gardizy can be reached at anissa.gardizy@globe.com. Follow her on Twitter @anissagardizy8 and on Instagram @anissagardizy.journalism.