The popular cleaning robot Roomba is going to be an Amazon.com Inc. (NASDAQ: AMZN) product.
The e-commerce giant announced Friday it signed an agreement to buy Bedford, Massachusetts-based Roomba maker iRobot Corp. (NASDAQ: IRBT) in an all-cash transaction valued at approximately $1.7 billion, including iRobot’s net debt.
In a securities filing, iRobot said it plans cost-reduction actions that will include laying off approximately 140 employees, or 10% of the company’s global workforce. The company has over 1,370 full-time employees, with 30% based outside of the U.S.
A spokesperson for iRobot declined to answer questions about the impact of the layoffs on the company's Massachusetts workforce, but said that the reduction in force is "completely separate" from Friday's Amazon announcement. In public documents, iRobot said that "certain non-core engineering functions" will be moved to lower-cost regions.
Amazon, one of the state's largest employers, had more than 20,000 employees in Massachusetts last year, including workers at Whole Foods Market, the grocery chain it acquired for $13.7 billion in 2017.
Amazon said it doesn't have a timeline for the closing of the deal with iRobot, which will remain based in Bedford. Until closing, the two companies will continue to operate independently.
After closing, Colin Angle will remain as CEO of iRobot. He will not report directly to Amazon CEO Andy Jassy; instead, iRobot will be part of Amazon Devices, led by Senior Vice President Dave Limp.
“We have no plans to operate iRobot differently than how they operate today in regards to assortment," Amazon said in a statement. "We will continue to supply other retailers and vendors with iRobot products, and continue to sell other products on Amazon.com.”
Amazon is known for making bold acquisitions in areas that can augment its logistic and delivery operations. In late July, it signed a deal with primary care organization One Medical to expand its reach in the health care industry. And the iRobot deal comes about four years after Amazon bought Boston-area online pharmacy PillPack for roughly $1 billion in cash.
The iRobot deal is not Amazon's first foray into the greater Boston area's robust robotics industry. North Reading, Massachusetts-based Kiva Systems, acquired by Amazon for $775 million in 2012, provided the foundation upon which Amazon Robotics was built. The Kiva deal "secured Amazon an army of robots custom-made to zip through warehouses, fulfilling shipment requests at a dizzying pace," a 2018 PitchBook analysis reads.
Founded in 1990, iRobot is known as the maker of an army of consumer robotics, including vacuum cleaner Roomba and mop Braava.
In recent years, the company has struggled with issues related to the supply chain and China tariffs. The company has been trying to differentiate itself from other cleaning robot makers by enhancing the intelligence of its robots and allow customers to personalize the cleaning process of their homes. An integration of iRobot's robots with Amazon's voice-controlled virtual assistant Alexa could enhance Amazon's vision of the smart home.
IRobot announced its second quarter results together with the Amazon deal. The company announced it had $255.4 million in revenue, down from $365.6 million in the comparable quarter last year. Net loss came at $43 million for the quarter. In a release, iRobot noted that its revenue performance "was primarily impacted by unanticipated order reductions, delays and cancellations from retailers in North America and EMEA."