Juul Labs Inc. is cutting around 650 jobs, or about 16% of its total workforce, according to a Juul official, as the embattled e-cigarette maker braces for a hit in sales after voluntarily stopping the sale of its most popular flavor in the U.S.
The Wall Street Journal reported late last month that Juul planned to eliminate around 10% to 15% of its workforce by year’s end.
Besides the job cuts, Juul will trim its spending by nearly $1 billion, including significant cuts in marketing and government affairs, the Juul official said. Axios earlier reported the size of the budget cuts.
The company this year has added an average of 300 employees a month, and its staff has swelled to just over 4,000 employees. It enacted a hiring freeze in September shortly before Chief Executive K.C. Crosthwaite took over. Mr. Crosthwaite left the tobacco giant Altria Group Inc. to take the helm of the startup in September.
The Trump administration is preparing to announce details on a plan to take off the market the fruity and minty e-cigarettes popular among young people in an effort to curb teenage vaping.
The Juul cuts are part of a broader reorganization as the company struggles to repair its frail relationship with regulators. Blamed for a rise in teenage vaping, Juul is the subject of several federal investigations, including a criminal probe by prosecutors in California. By May, the company must submit for Food and Drug Administration review any products it wants to remain on the U.S. market beyond that point.
Juul last year voluntarily stopped selling its sweet and fruity flavors in U.S. retail stores but continued to sell those flavors on its website until last month. The startup last week stopped selling its mint refill pods, which represent 70% of its U.S. sales.
Write to Kimberly Chin at kimberly.chin@wsj.com and Jennifer Maloney at jennifer.maloney@wsj.com
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https://www.wsj.com/articles/juul-to-cut-roughly-650-jobs-or-16-of-workers-11573561830
2019-11-12 12:30:00Z
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