iRobot Files for Chapter 11 Bankruptcy Protection Amid Intensifying Market Challenges

iRobot, the Massachusetts-based developer of the Roomba line of robotic vacuum cleaners, has formally initiated Chapter 11 bankruptcy proceedings in the U.S. District Court for the District of Delaware. The filing comes amid a sharp decline in revenue and profitability, with the company reporting $1.4 billion in total revenue for fiscal year 2024, a 22% drop from the prior year. Gross margins have compressed to 27%, down from 41% in 2021, driven by rising input costs and aggressive pricing in a saturated market. The company’s financial distress is attributed to multiple headwinds, including increased competition from Chinese manufacturers like Ecovacs and Roborock, which offer similarly capable products at significantly lower price points. The impact of U.S. tariffs on imported components—particularly those from China—has added approximately $180 million in annual costs, according to internal financial disclosures. These tariffs, imposed under Section 301 of the Trade Act, have disproportionately affected iRobot’s supply chain and pricing strategy. The Chapter 11 filing allows iRobot to reorganize its debt while continuing operations under court supervision. The company has secured $200 million in debtor-in-possession financing from a consortium of private lenders to support ongoing operations. Stakeholders, including creditors, employees, and retail partners such as Amazon and Best Buy, are now awaiting restructuring plans, which could include asset sales, workforce reductions, and potential shifts in product development focus.