Juul Labs Announces Workforce Reduction Plan to Boost Financial Performance
Juul Labs announced Wednesday that it intends to lay off around 30% of its personnel in order to reduce expenses and increase revenues.
According to a corporate representative, the layoffs would effect around 250 individuals, lowering the company’s headcount to approximately 650.
According to the Juul spokeswoman, this will save the company $225 million in operational expenditures.
Juul, which is seeking regulatory approval to keep its e-cigarette products on the market, claims the reduction would increase its profit margins and free up funds for legal payments.
“Today, Juul Labs is announcing a company restructuring aimed at reducing our operating costs and positioning us to continue to advance our mission during a period of regulatory and marketplace uncertainty,” the firm said in a news statement.
The Food and Drug Administration pulled the vaping giant’s goods from the market last year. Juul challenged the ruling, and the restriction was temporarily lifted.
Later, the firm was able to collect enough funding from early investors to escape bankruptcy. It also revealed intentions to lay off about a third of its workforce at the time.
According to a company spokeswoman, Juul has been seeking to acquire more funding from investors while waiting for a ruling from US authorities on whether its present products may remain on the market.
In addition, the firm has been mired in costly legal fights, paying over $1 billion in settlements to 45 states for its part in triggering a nationwide spike in teen vaping.
Juul was sued earlier this week for claimed patent infringement over some e-vapor products owned by subsidiary NJOY by Marlboro producer Altria Group, which formerly held a large investment in Juul.
A Juul spokeswoman told CNBC in reaction to the litigation, “We stand behind our intellectual property and will continue to pursue our infringement claims.”
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