The vacuum maker also announced it would lay off 31% of its employees, around 350 people, and that its chair and CEO Colin Angle would step down effective immediately.
iRobot shares fell 15% on the news.
The fate of the deal was plunged into uncertainty after The Wall Street Journal reported that the European Union would not offer regulatory approval.
“We’re disappointed that Amazon’s acquisition of iRobot could not proceed,” Amazon senior vice president and general counsel David Zapolsky said in a release.
iRobot said it would focus on margin improvements, reduce spending on research and development and pause all work on “non-floorcare” products, including its air purifiers and robotic lawn mowers.
“The termination of the agreement with Amazon is disappointing, but iRobot now turns toward the future with a focus and commitment to continue building thoughtful robots and intelligent home innovations that make life better,” iRobot’s Angle said in a release.
Amazon will pay iRobot a previously-agreed-upon $94 million breakup fee. The terminated deal would have originally valued iRobot at roughly $1.7 billion.
The robotic vacuum maker has a market capitalization of under $400 million, following Monday’s news and prior reports that the European Union would move to block the deal.
In July, iRobot entered into a $200 million financing facility to fund its operations as a stopgap until the deal closed.
The European Commission did not immediately return CNBC’s request for comment.
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