A tech retailer now announces hundreds of unexpected layoffs after its acquisition deal with Amazon failed to get approved.
Amazon said on Monday it would not move forward with a planned acquisition of vacuum-maker iRobot, with the two companies saying in a release there was “no path to regulatory approval for the deal.”
iRobot announced it would lay off 31% of its employees, around 350 people, and that its chair and CEO, Colin Angle, would step down effective immediately.
Shares of the company fell more than -10% on the five-day trading week.
The fate of the deal was plunged into uncertainty after The Wall Street Journal reported that the European Union would not offer regulatory approval, reports CNBC.
The European Commission, the executive body of the EU, launched a probe in July, saying that the proposed deal could result in Amazon hindering iRobot rivals from competing on Amazon’s online marketplace.
The commission argued that Amazon could delist or reduce rival products’ prominence in search results or elsewhere.
“Our in-depth investigation preliminarily showed that the acquisition of iRobot would have enabled Amazon to foreclose iRobot’s rivals by restricting or degrading access to the Amazon Stores,” Margrethe Vestager, the European Commission’s executive vice president, said in a statement.
She added that Amazon’s control over the marketplace “could have restricted competition in the market for robot vacuum cleaners, leading to higher prices, lower quality, and less innovation for consumers.”
“We’re disappointed that Amazon’s acquisition of iRobot could not proceed,” David Zapolsky, senior vice president and general counsel at Amazon, said in a release.
iRobot said it would focus on margin improvements, reduce spending on research and development, and pause all work on “non-floorcare” products, including its air purifiers and robotic lawn mowers.
Also Read: A Massive Furniture Company Now Lays Off 1,650 Employees
Other Economy News Today
A massive clothing retailer will now lay off 357 employees, including 200 at its corporate headquarters, sources report.
Outdoor recreation retailer REI is cutting its workforce for the third time in less than 12 months, reports RetailDive.
Recreational Equipment, Inc., doing business as REI, is an American retail and outdoor recreation services corporation.
It is organized as a consumers’ co-operative.
REI sells camping gear, hiking, climbing, cycling, water, running, fitness, snow, travel equipment, and men, women and kids clothing.
In a Thursday announcement from CEO Eric Artz that was shared with employees, the executive said 357 people will be laid off — 200 employees at its Sumner, Washington, headquarters, 121 in distribution centers and 36 in other roles, including experiences.
Non-headquarters store-specific roles are not affected by the layoffs, the company said.
Those being let go were notified in one-on-one conversations on Thursday, REI said.
Employees whose jobs were cut will receive separation benefits that include severance, continuation of health coverage, and outplacement support and services.
Last February, REI laid off 167 people at its corporate headquarters as part of a restructuring.
In October, the outdoor retailer cut 275 people in a store operations overhaul.
REI has about 16,000 employees and about 180 locations in the U.S., according to its website.
In addition to this round of job cuts, Artz said the company will pursue additional cost-cutting measures this year.
They include not funding merit increases for headquarters employees, including for leaders, this year.
REI also said it will not backfill recently vacated leadership positions and it will reduce the size of its senior leadership team by 22% this year.
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Also Read: A US Company Now Declares An Unexpected Bankruptcy
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