Amazon buys Roomba manufacturer iRobot in $1.7 billion deal: Online retail giant's 4th largest acquisition follows second straight quarter of massive losses

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Amazon has bought iRobot, the technology masterminds behind the Roomba robot vacuum, for an eye-watering $1.7billion deal.

The tech company have sold millions of the popular vacuum designs and automated cleaning devices, which they have specialized in since 2002. 

Amazon intends to keep Colin Angle as the CEO of iRobot, and the acquisition will increase the company's stake in consumer robotics - alongside tech devices like Ring and Alexa. 

Announcing the acquisition, Dave Limp, SVP of Amazon Devices, said: 'Over many years, the iRobot team has proven its ability to reinvent how people clean with products that are incredibly practical and inventive — from cleaning when and where customers want while avoiding common obstacles in the home, to automatically emptying the collection bin.

Amazon has bought iRobot for an eye-watering $1.7billion. This will be Amazon's fourth-biggest acquisition. Tech company iRobot have sold millions of the popular vacuum designs and automated cleaning devices, which they have specialized in since 2002

Dave Limp, SVP of Amazon Devices, said: 'I’m excited to work with the iRobot team to invent in ways that make customers’ lives easier and more enjoyable'

'Customers love iRobot products — and I’m excited to work with the iRobot team to invent in ways that make customers’ lives easier and more enjoyable.' 

iRobot was founded in 1990, and the company is best known for its automated cleaning device, Roomba.  

This is Amazon's fourth biggest deal to date, with its acquisition of Whole Foods Market in 2017 still sitting at the top after costing $13.7billion. 

Behind that was Amazon's purchase of film studio Metro-Goldwyn-Mayer for $8.45billion and care provider One Medical for $3.9billion.

Amazon's four acquisitions this year have been Strio.AI, GlowRoad, primary healthcare clinics One Medical and iRobot.

In 2021, the company acquired five others - Umbra 3D, TV and film company Metro-Goldwyn-Mayer, Art19, Wickr and Veeqo. 

Last week, Amazon announced a massive loss for the second straight quarter, thought to be caused as consumers returned to brick-and-mortar stores. The company also had a net loss due to their Rivian investment.

Apple also shared lukewarm news, revealing that its profits fell 11 percent thanks to supply chain issues caused by the pandemic and China's COVID lockdowns.

iRobot Roomba 980 cleaning vacuum. Amazon intends to keep Colin Angle as the CEO of iRobot, and the acquisition will increase the company's stake in consumer robotics - alongside tech devices like Ring and Alexa

Amazon's market summary has taken a dip in the last six months, after the company announced a massive loss for the second straight quarter

Tech stocks were rallying after-hours, however, because both Apple and Amazon's sales surpassed expectations - despite inflation and economic turmoil raising fears of a recession.

Amazon sales topped $121 billion in the quarter, but the company logged a loss of $2 billion dollars as it continued to work to rein in costs.

Many of those were related to expansion during the sales bonanza it experienced at the start of COVID. The loss was less than during the first quarter of this year, however, when the company announced a $3.8 billion loss. That loss was the first since 2015, and was also impacted by a large write-down on their electric vehicle company, Rivian.

Amazon's shares still jumped 12 percent in after-hours trading.

CEO Andy Jassy said in a statement that Amazon is seeing its revenue accelerate as it invests in its Prime membership and offers more benefits to members, such as its recent deal to give free access to meal delivery service Grubhub for a year. 

He said Amazon continues to feel inflationary pressure from higher energy and transportation costs, but it has been making progress controlling expenses related to its fulfillment network. 

Between 2019 and 2021, Amazon nearly doubled the number of warehouses and data centers it leased and owned to keep up with rising consumer demand.

But as consumers shifted their habits, Amazon found itself with too many workers and too much space, which added billions in extra costs.

The company has been subleasing some of its warehouses, ending some of its leases and deferring construction on others to deal with the problem.

Brian Olsavsky, Amazon's chief financial officer, said during a media call on Thursday that the company is slowing down its expansion plans for this year and the next, in order to better align with customer demand.

On the labor side, Amazon has been able to reduced its headcount through attrition and staffing levels were more in-line with demand, Olsavsky said.