iRobot files for bankruptcy following brief stock surge

It turns out support from the Trump administration couldn't get here fast enough for iRobot Corporation (IRBT).

Less than two weeks after the maker of the Roomba vacuum cleaner's shares soared on a report that the Trump administration was going to throw its support behind the domestic robotics industry, iRobot has filed for bankruptcy.

The company announced on Sunday that it had filed for Chapter 11 protection in a Delaware bankruptcy court and would go private after being bought by China-based Picea Robotics, its primary manufacturer. Under the terms of the agreement, Picea will receive 100% of the equity interests in iRobot, which the company said will allow it to continue pursuing its product development strategy and "maintain its global footprint."

The company's stock plunged 72.7% on Monday.

Although iRobot generated $682 million in revenue in 2024, and remains a dominant player in key markets like the United States and Japan, it has been struggling with lower profits due to increased competition from Chinese rivals like Ecovacs Robotics.

The company announced an operational restructuring plan in January 2024 that led to the ouster of former CEO Colin Angle, as well as a 31% reduction in its workforce.

The restructuring plan came in the immediate wake of a failed $1.4-billion takeover bid by Amazon (AMZN), which would've been the e-commerce giant's fourth-largest acquisition ever at that point.

The companies agreed to terminate the agreement after European regulators threatened to block the deal over concerns that Amazon would hurt competition from smaller rivals.

Earlier this year, iRobot CEO Gary Cohen said that the company had "meaningfully reduced operating losses, improved gross margins and optimized cash flow" as part of its turnaround strategy, while noting that the company had now reduced its headcount by 50%.

But the headwinds proved to be too much for iRobot.

Increased competition and higher tariffs were bad for business

The company said in its bankruptcy court filings that the increased competition had forced it to lower its prices, while also having to make significant investments into upgrading its technology.

Meanwhile, it also suffered substantial damage due to President Trump's tariffs, particularly a 46% tariff on Vietnam, where iRobot manufacturers its Roomba vacuum cleaners for the US market.

The company said in its court filing that the tariffs raised its costs by $23 million in 2025 and made it challenging to map out a strategy for the future, leading it to file for Chapter 11 protection.

As the bankruptcy process proceeds, its operations will continue as normal, iRobot said.

"Today's announcement marks a pivotal milestone in securing iRobot's long-term future," Cohen said in a statement. "The transaction will strengthen our financial position and will help deliver continuity for our consumers, customers, and partners."

Shares of iRobot surged nearly 74% earlier this month when a report in Politico indicated that the Trump administration was looking to boost robotics manufacturing in the US.

According to the report, Commerce Secretary Howard Lutnick has been meeting with CEOs of companies in the robotics industry to discuss the White House's plans, indicating that he is "all in" on helping ramp up development of the technology in the United States.

Central to the administration's plans is Trump potentially issuing an executive order to accelerate development of robotics sometime next year, Politico reported.