iRobot layoffs are "disappointing and sad" for the Massachusetts-based company, economist says
BEDFORD - About 350 iRobot employees are going to lose their jobs after the Bedford-based company announced a 31% cut to its workforce. iRobot was set to merge with Amazon, but the technology giant said it was calling off the deal as a result of increased merger scrutiny in the United States and European Union.
Boston College professor and economist Peter Ireland told WBZ-TV's Paula Ebben that it's a frustrating turn of events for workers at the business that invented the hugely popular Roomba robot vacuum.
"When you hear news like this about a company, particularly a Massachusetts company, immediately our thoughts go out to the people directly affected," Ireland said. "It's hard for us, I think, locally to spin this in any other way - it's disappointing and sad."
Competition concerns from EU, FTC
The European Commission made it known last year that it thought the merger could be anticompetitive, and had concerns that Amazon might make it more expensive for iRobot's rivals to sell on its platform. The deal was also at risk of being blocked in America by the Federal Trade Commission.
The news could have ramifications for future tech company merger conversations, Ireland said.
"I do think corporate management will have to take into account the decreased likelihood that linkups of this kind are going to work," Ireland said.
The future of iRobot
Amazon is paying the Bedford company a $94 million termination fee, per their merger agreement, and iRobot says it sees "a clear path to reinvigorating our outstanding brand, product performance and underlying technology."
Ireland agreed there's still hope that iRobot can still be a successful business in Massachusetts.
"iRobot has been an innovative company that's really succeeded at producing appliances that American consumers really want and really pay for," he said. "They've long been a successful corporation and hopefully this reset will provide them with a firmer foundation on which to rebuild."
Should other Massachusetts workers be concerned about layoffs?
Ireland said anytime there are stories about mass layoffs, workers may be concerned about their own jobs and worry that the country is headed for a recession. He says right now, though, there is "no evidence of a serious slowdown."
"We got a very strong report on GDP last week. We're going to be looking forward this Friday to an employment report that also promises to be quite solid, if not equally strong," he said. "Despite these stories from individual companies, particularly in the tech sector, the thing to remember is the United States economy right now continues to grow robustly."
