iRobot (NASDAQ:IRBT), which develops robotic systems used to clean homes, announced yesterday that it would lay off about 85 of its workers. The iRobot layoffs will affect about 7% of the firm’s workforce.
The robot maker dismissed about 100 of its workers in August 2022. Those iRobot layoffs occurred during the same month that it agreed to be acquired by Amazon (NASDAQ:AMZN). The Federal Trade Commission (FTC) is currently evaluating the acquisition.
Explaining the reason for its latest job cuts, iRobot reported that it expects “market conditions will remain challenging into 2023.”
Also yesterday, IRBT announced that its sales last quarter had fallen 21.4% versus the same period a year earlier to $358 million. Additionally, it lost $61.6 million, excluding certain items. In Q4 2021, the company’s adjusted operating loss came in at $33.6 million. IRBT reported that its profitability was negatively impacted last quarter by “increased promotional activities.”
IRBT Stock: The Goods-to-Experiences Shift
iRobot has likely been a victim of the shift in consumer spending that has occurred amid greatly reduced fears about the coronavirus in recent months. Specifically, during this time, consumers have generally spent much more money on physical products and much more on experiences.
As a result, many sellers of products like PCs, mobile phones and apparel have struggled. Meanwhile, hotel owners, airlines, restaurant owners and online travel agencies have generally reported strong results.
Illustrating the strength of companies within the experiences space, in recent days, Uber (NYSE:UBER), Marriott (NASDAQ:MAR) and Avis (NASDAQ:CAR), which are all in the “experiences” category, have reported generally strong financial results.
Going forward, investors should try to determine whether this divergence remains intact. If it does, they should continue to buy the stocks of companies within the experiences sector.
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
