E-cigarette company Juul Labs has announced plans to cut about 30% of its workforce, affecting approximately 250 people, in an effort to reduce costs and increase profitability. The move comes as the company seeks federal authorization to continue selling its products in the market. The layoffs are expected to save Juul $225 million in operating expenses. The company stated that the restructuring aims to navigate the uncertain regulatory and marketplace environment it currently faces.
Having faced a ban from the Food and Drug Administration (FDA) last year, which was later reversed temporarily, Juul has been grappling with legal battles and costly settlements. It has paid over $1 billion in settlements to 45 states for its alleged role in a surge of teen vaping. To avoid bankruptcy, the company secured enough financing from early investors and had previously announced its intention to cut jobs. Now, as it eagerly awaits a decision from U.S. regulators regarding the fate of its current products, Juul is seeking additional capital from investors.
Recently, Juul has also been entangled in a patent infringement lawsuit brought by Altria Group, the maker of Marlboro cigarettes and a former significant stakeholder in Juul. The company remains determined to defend its intellectual property and pursue its infringement claims. With these challenges, the layoffs are expected to improve Juul’s margins and provide the necessary funds for litigation settlements amidst a period of uncertainty in the e-cigarette industry.
