Juul Announces Layoffs And Exit From Two International Markets
The United States-based e-cigarette company Juul is planning to lay off more than half of the global employees, the Wall Street Journal reported, citing according to the people familiar with the matter. According to the company’s website, it currently employs 2,200 people. Its plan to cut off a considerable amount of salesforce comes amidst its decision to halt its sales across Asia and Europe.
In a press release published on Thursday, Juul announced that it “will be making a significant global job reduction” and will be exiting the EMEA and APAC regions owing to the nether return on the investment. Recently, It has also announced its plans to exit South Korea, Austria, Belgium, Portugal, and Spain. The series of layoffs began last September when Altria’s former executive K.C. Crosthwaite stepped in as the CEO of the company. The embattled e-cigarette company said that laying off the employees is a part of its restructuring plan.
“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 obtained by CNN Business. “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.
In July 2020, Juul announced that it has submitted a Premarket Tobacco Product Application (PMTA) to the U.S. Food and Drug Administration for its electronic nicotine delivery system. In its submission, the company has provided a scientific foundation that their products are “appropriate for the protection of the public health.” Last month, FDA notified Juul Labs that it is going to carry out “substantive scientific review.”
In November 2019, the company announced a USD 1 Billion cost-cutting plan and also added that it will lay off about 650 employees. While it unveiled that firm will be investing in the product team to explore “new technologies to combat underage use.” In the latest announcement, it announced the investment in science and technologies to not just fulfill the short term revenue goals but earn trust in the market.
Altria brought a 35% stake in Juul which valued it around USD 35 Billion in 2018. The huge growth potential of the vaping market as a smoking alternative had enticed investors to bet on the startup. However, its reputation deteriorated after U.S. regulators raised health concerns. Moreover, the underage vaping had welcomed a lot of criticism from several state government bodies. Last year, the Trump government announced the ban of mint and fruit-flavored vapes. According to the data from the Wall Street Journal, the company’s market share in the U.S. decreased from 75% to 58% in November 2018.
On Wednesday. Attorney General Bob Ferguson said that is taking legal action against the company. He claims that Juul is targeting teens for their sales in their advertising campaigns. “Bright colors, youthful models … they utilized what they call brand ambassadors to specifically reach youth, these are individuals specifically selected because of their influence on social media,” Ferguson said. He also mentioned that 88% of Juul’s followers are between 13 and 20 years old.