Vaping company Juul Labs is set to lay off 30% of its workforce in a bid to reduce costs, according to a report by the Wall Street Journal. The company plans to cut around 250 jobs, leaving its workforce at approximately 650 employees. A spokesperson for Juul stated that these cuts will result in a $225m reduction in operating expenses.
These layoffs come at a crucial time for Juul as it awaits a decision from US regulators regarding the sale of its products in the country. Last year, the company faced financial difficulties and was on the brink of bankruptcy. In an attempt to raise funds, Juul aimed to secure $1bn, following its revenue of $800m in 2022. However, its stock market valuation plummeted from $38bn in 2018, when it received investment from Altria Group. Altria Group later divested its stake in the company earlier this year.
Juul had been preparing to file for bankruptcy in the US until it received a financial lifeline in November from long-time shareholders Nick Pritzker and Riaz Valani. As part of the rescue plan, the company had already been considering job cuts and reducing its operating budget as part of a broader reorganization effort.
One of the major challenges faced by Juul is a series of lawsuits accusing the company of targeting minors in its marketing campaigns. Over the span of almost three years, the number of e-cigarette products sold in the US increased by 47%. These legal battles have undoubtedly contributed to the company’s current struggles.
In conclusion, Juul Labs’ decision to lay off 30% of its workforce in order to cut costs is a significant move for the company. With its stock market valuation plummeting and ongoing legal battles, Juul is facing a challenging period. The outcome of the US regulators’ decision will greatly impact the future of the company and its ability to continue selling its products in the country.