After two major layoffs in one year, is Amazon, the former king, no longer able to survive?

In the past two years, there have been constant reports of layoffs, asset liquidations, and closures of companies related to the cross-border e-commerce circle.

In April this year , BowFlex, a well-known fitness equipment seller on Amazon, filed for bankruptcy; in May, Shoes For Crews, a well-known shoe brand, filed for bankruptcy; in June, Clarks, a shoe seller, laid off a large number of employees; in July, Emma Sleep, a big home bedding brand, announced a layoff of 200 people; in the same month, Care/of, a nutrition and health product brand, announced the suspension of operations and the dismissal of all employees; last month, even the big E-bike brand Juiced Bikes quietly collapsed...

With the intensification of industry competition and the rapid changes in the global consumer market, even the once-popular old-fashioned best-sellers cannot escape the "disaster", and news like this still continues to come in today's era.

iRobot suddenly lays off a large number of employees

iRobot , the global leader in sweeping robots and former category king on Amazon , is now in trouble.

Recently, iRobot submitted a document to the U.S. Securities and Exchange Commission, stating that iRobot will lay off another 105 employees in this restructuring plan, which means that 16% of the company's current employees will be affected by the layoffs.

It is understood that this is the second layoff measure implemented by the company this year.

In this regard, iRobot CEO Gary Cohen said in a conference call on the earnings report: "The restructuring we have carried out has fundamentally changed the way we innovate, develop and manufacture robots, which is critical to improving the company's performance and creating long-term shareholder value. And, with lower operating costs, we expect to improve margins and profitability in 2025."

In fact, as early as the end of January this year, iRobot had carried out its first round of large-scale layoffs this year.

The cause was "Amazon's acquisition of iRobot failed."

According to information, at the beginning of this year, Amazon wanted to acquire iRobot for US$1.4 billion, but as the EU continued to strengthen its supervision, it also pointed out that the transaction would increase the threat to other companies.

This eventually led to Amazon being forced to announce that it would abandon the plan and pay iRobot $94 million as termination fees.

On the day the acquisition plan was terminated, iRobot announced a restructuring plan, which would lay off 31% of the company's total employees, about 350 people, and Colin Angle, chairman of the board and CEO, would resign. In addition, iRobot's stock price fell 19% that day to its lowest level since 2009, and the company's business was also greatly affected.

It can be said that the failure of the acquisition plan at the beginning of the year dealt a heavy blow to iRobot, which is one of the reasons for the company's recent large-scale layoffs. Data shows that iRobot's global employee headcount has decreased by almost 50% since the end of January.

At the same time, iRobot’s financial situation also has a certain impact on this personnel adjustment.

The financial report shows that in the first three fiscal quarters of this year, iRobot's revenue reached US$510 million, a decrease of 12.56% compared with US$583 million in the same period last year, and the accumulated losses reached US$68.41 million.

Looking at the third quarter alone, iRobot's revenue was $193.4 million, slightly higher than the $186.2 million it generated in the same period last year.

iRobot also expects that by the fourth quarter of 2024, the company's revenue will be between $175 million and $200 million, with a gross profit margin of 24%-27%, and an operating loss of $31 million to $22 million. Although the loss amount has decreased compared to the same period last year, the company's financial situation is still in a grim situation.

However, iRobot Chief Financial Officer Julie Zeiler said that the company's full-year revenue is expected to resume year-on-year growth in 2025, and as its product lineup expands, the company's revenue growth in the second half of 2025 will be stronger than in the first half.

It must be said that iRobot's current situation is closely related to the fierce industry competition and product marketing innovation in today's era.

The global robot vacuum cleaner market is too competitive, and iRobot lacks competitiveness

In the past few years, other brands have continued to emerge in the field of sweeping robots in countries around the world, which has intensified market competition and further highlighted the shortcomings of iRobot's products.

On the one hand, iRobot has hardly innovated any more eye-catching products except robot vacuum cleaners. According to data, iRobot launched the first generation of Roomba in 2002, with cumulative sales exceeding 3 million units , and sales have skyrocketed.

However, since then, the robots it produced for mowing, pool cleaning, gutter cleaning, etc. have not achieved good results. In 2021, iRobot launched a handheld vacuum cleaner, which was later discontinued. In the same year, the air purifier it acquired when it acquired Aeris Cleantec AG for US$72 million was also discontinued.

One user commented, "iRobot really needs to step up its innovation game. My car can now drive me to work automatically, and I'm just a passenger every day. But when I get home, my Roomba vacuum cleaner is still the same, getting stuck under the couch. After all these years, why can't they give Roomba a complete upgrade and embed the now popular artificial intelligence AI technology into it?"

On the other hand, with the rapid development of the industry, there are already thousands of brands and manufacturers involved in the field of sweeping robots around the world, making this track extremely crowded.

Data shows that in 2023, the global robot vacuum cleaner market will reach approximately US$6.60 billion, a year-on-year increase of 0.8%. It is expected that by 2028, the market size will grow to US$9.97 billion, with a compound growth rate of 10% in the next five years. The main markets include Western Europe, North America and Asia Pacific, among which Chinese brands have a particularly impressive market share in these regions.

For example, in recent years, China's sweeping robot brands such as Ecovacs, Roborock, and Dreame Technology have been very popular overseas and have successfully occupied a place in the overseas market. Among them, Ecovacs is known as the "first stock of sweeping robots", Roborock's sweeping robots rank first in the world in sales, and Dreame's sweeping robots are also world-renowned.

In addition, the sweeping robot market is also growing well in the Middle East, Africa, Latin America and other regions, with compound growth rates of 83.5% and 73.6% respectively in the past five years.

Overall, fierce competition in the robot vacuum cleaner market has been going on in recent years. With the serious internal competition and the overall economic downturn, many brands and manufacturers have gradually developed products in other new areas. However, iRobot is still moving forward along the old path. Once it encounters some setbacks, it will inevitably fall into trouble.

Therefore, for major brands or companies, if they want to stay at the forefront, they must keep up with market trends, especially the speed of product updates and iterations. After all, no business model can always be popular, and no one can always be the "darling" of the times. Even the industry's big names and former leaders are inevitably affected by this.