Juul Labs, a leading e-cigarette company, has announced plans to cut its workforce by 30% in order to reduce costs and increase profits. The layoffs will affect approximately 250 employees, resulting in a total headcount of around 650. This move is expected to reduce operating expenses by $225 million. Juul Labs is currently seeking federal authorization to keep its e-cigarette products on the market and believes that these job cuts will improve margins and provide additional funds for litigation settlements.
By David Paul Morris | Bloomberg | Getty Images
Juul emphasized that this restructuring is necessary to navigate through a period of regulatory and marketplace uncertainty. The company faced a setback last year when the Food and Drug Administration ordered its products off the market, but the ban was temporarily reversed following an appeal by Juul. Despite this, Juul still secured enough financing from early investors to avoid bankruptcy and previously announced plans to lay off almost a third of its workforce.
Permission granted to keep Juul Labs products on the market
As Juul awaits a decision from U.S. regulators on the fate of its current products, it has been actively seeking additional capital from investors. The company is also involved in costly legal battles and has already paid over $1 billion in settlements to 45 states for its contribution to the rise in adolescent vaping. Most recently, Juul was sued by Altria Group, the maker of Marlboro cigarettes, for alleged patent infringement related to e-vapor products owned by NJOY, a Juul subsidiary. Juul has vowed to defend its intellectual property and pursue its infringement claims.
