Friday, April 19, 2024

Juul e-cigarette cuts more than half: plans to cut 1200 jobs


On September 4, according to CNN, electronic cigarette maker Juul laboratories will plan to lay off more employees and withdraw from the Eurasian market.

Juul did not specify the number of jobs it plans to cut, but said in a press release released on Thursday that the cuts would constitute a significant reduction in global employees. The company currently has about 2200 employees.

According to the Wall Street Journal, people familiar with the matter cited the company’s plan to cut 1200 jobs.

In a statement to CNN business, a Juul spokesman said: ‘no final decision has been made and we will continue to evaluate it.

The layoff is part of a series of changes that began in September last year, when KC crosswaite, a former executive at Altria, became chief executive amid increasing scrutiny by retailers and regulators.

The company announced a $1 billion cost reduction plan in November and cut 650 jobs. In April, it laid off more employees.

For e-cigarette start-ups, this is a difficult and rapid failure.

In December 2018, Altria Group acquired 35% of Juul’s shares for about $38 billion. It was recognized in the industry at that time that e-cigarettes had great growth potential and that e-cigarettes had been described as a safer form of smoking, which could help smokers stop using traditional cigarettes.

But as concerns about the health risks of e-cigarettes are growing and U.S. regulators urge a crackdown on e-cigarettes, Juul’s value is falling. The company was also criticized for selling mango, cream and cucumber flavored puffs, which were popular among teenagers and stopped selling since.

The company is now trying to rebuild trust and shift its focus to its main customer: adult smokers transiting from traditional cigarettes. In July, the company said it had submitted a pre market tobacco product application to the food and drug administration, a key step in being able to continue marketing and selling its aerosol products in the United States.

‘throughout this year, in a difficult external environment, we have been seriously assessing how we allocate resources in evolving categories that lack trust, based on initiatives that create long-term value and control our future, ‘crosswaite said in an email to employees on Wednesday.

As part of the layoff plan announced on Thursday, Juul said it was exploring the possibility of exiting the European and Asian markets, which did not provide the necessary returns given the cost of continuing to invest in the markets.

‘we are still in the exploratory phase of layoffs, so we don’t have any details to share with the expected number of employees affected, the functions and countries affected,’ crosswaite said in an email.

He added that the savings will enable Juul labs to continue to invest in science and evidence capabilities in the core markets that make up the vast majority of our business, maintaining research and development of control technologies and future products.

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