iRobot, the pioneering robotics firm known for its autonomous vacuum cleaners, has officially filed for Chapter 11 bankruptcy. This is the end of its 35-year path that began back in 1990. Founded in Bedford, Massachusetts by MIT roboticist Rodney Brooks and his students Colin Angle and Helen Greiner, iRobot became a household name, selling over 50 million robots that transformed how people manage their homes. This drastic turn of events follows a series of challenges, including declining earnings, increased competition from cheaper alternatives, and significant workforce reductions.
His fellow MIT professor Rodney Brooks, the founding director of iRobot, was at the head of that charge in robotics. During the 1980s, he was inspired by looking at insects. He was struck by the fact that you could get complex behaviors from very simple systems, an epiphany that would lead to iRobot’s creative and pioneering spirit. By the end of the 1990s, the company had successfully converted these clinical insights into consumer-ready products. As market dynamics changed, demand skyrocketed, competition increased, and inflation hit. iRobot was unable to keep its edge.
In 2022, tech giant Amazon made its move on iRobot. It formally committed to buying the tiny company for $1.7 billion, its fourth-largest acquisition ever. Even with this enormous vote of confidence from one of the principal players in the tech economy, iRobot continued to face deep financial woes. The company has since 2021 fought an uphill battle with declining earnings. Supply chain disruptions and fierce competition from Chinese manufacturers dumping cheaper robot vacuums on the market have all taken a toll on their performance.
As part of an initiative to return the company to profitability and focus on a more sustainable long term strategy, iRobot reported a 31% reduction in their workforce. This decision was representative of the company’s need to pivot its business strategy during a seasonal changing of the guard in market conditions. Colin Angle, iRobot’s CEO, expressed a commitment to creating “innovative, practical products” and finding “a better place for our team to continue our mission.”
Despite the bankruptcy filing, iRobot aims to implement a restructuring plan that allows it to continue operating as a viable entity. During the proceeding under the court’s supervision, the company sought to reassure stakeholders that it would fulfill all of its requirements to employees and vendors.
“We will meet our commitments to employees and make timely payments in full to vendors and other creditors for amounts owed throughout the court-supervised process.” – iRobot
Furthermore, iRobot emphasized that it would “continue operating in the ordinary course with no anticipated disruption” to its app functionality or customer programs. This reflects an interest in preserving their existing ecosystem with international partners and continuing product support for the long-term.
Just look at how robot vacuums have transformed home cleaning schedules. They condition consumers to put faith in automated systems to circumvent furniture and perform household tasks effectively. Enter competition. However, as the market got flooded with more affordable options, iRobot found it difficult to stay on top.
Industry analysts have warned that this bankruptcy is a sign of tech’s big bust. Firms are finding it increasingly difficult to compete against new entrants.
“Robot domination may have just taken [another step forward.” – TechCrunch
In 2015, iRobot created a corporate venture arm to further innovation and entrepreneurship in the industry with their investments. This massive initiative is indicative of the company’s long-term vision and build it better mentality even in much sunnier economic times. As inflation hit and recession fears loomed, it became harder for iRobot to fund its loftier goals.
