Juul stops sales of popular mint flavor
New York (CNN Business)Embattled e-cigarette maker Juul Labs is laying off additional employees and considering pulling out of some international markets as part of what has become a year-long effort to turn its business around.
Juul did not specify the number of positions it plans to eliminate, but said in a release Thursday that the layoffs will amount to a “significant reduction in global force.” The company currently employs around 2,200 people. The Wall Street Journal reported that the company aims to cut around 1,200 workers, citing people familiar with the matter.
“No final decisions have been made and we will continue to go through our evaluation process,” a Juul spokesperson said in a statement to CNN Business.
The layoffs are part of a series of changes at the company that began last September, when K.C. Crosthwaite, a former executive at tobacco company Altria, stepped in as CEO amid growing scrutiny of the company by retailers and regulators.
The company last November announced a $1-billion cost-cutting plan and 650 layoffs. In April, it laid off additional employees.
It’s been a hard and fast fall for the vaping startup. In December 2018, Altria bought a 35% stake in Juul in a deal that valued it around $37 billion. It was a recognition at the time of what the industry saw as the significant growth potential of vaping, which had been portrayed as a safer form of smoking that could help smokers stop the use of traditional cigarettes.
But Juul’s value deteriorated as concerns mounted about the health risks of vaping and US regulators pushed for a crackdown on e-cigarettes. The company was also criticized for selling pods with flavors like mango, creme and cucumber that became popular with teens, products it has since discontinued.
The company is now trying to rebuild trust and shift focus to its key customers: adult smokers transitioning from traditional cigarettes. In July, the company said it had submitted a Premarket Tobacco Product Application with the Food and Drug Administration, a crucial step in being able to continue marketing and selling its vaping products in the United States.
“Throughout this year and against a difficult external environment, we have continued to carefully evaluate how we allocate resources against initiatives that create long-term value and control our future in an evolving category lacking in trust,” Crosthwaite said in an email to staff Wednesday evening, which was obtained by CNN Business.
As part of the reductions announced Thursday, Juul said it is “exploring the possibility” of exiting markets in Europe and Asia, which “have not provided the kind of return necessary given the cost to continue investing in the market,” the press release stated.
Crosthwaite said in his email: “We’re still in the exploratory stages of this reduction, so we don’t have any details to share about the expected number of impacted employees, or the functions and countries that will be impacted.” He added that the reductions “will allow Juul Labs to continue to invest in science and evidence capabilities, access control technologies and future products in our core markets that make up a vast majority of our business.”
Source: Read Full Article