E-cigarette maker Juul confirmed Tuesday that it will lay off 650 employees, or roughly 16% of its workforce, as the embattled startup reorganizes its business in the face of increasing regulatory pressure on the vaping industry.
The cuts come after Juul last week voluntarily, which account for 70% of the company’s U.S. sales. Juul last year stopped selling sweet and fruit-flavored pods in retail stores, citing their appeal to youth users. The company last month also stopped selling them through its website.
While Juul has claimed that its products are aimed at helping adult cigarette smokers quit tobacco,younger consumers.
More than 1,800 Americans across 49 states have been diagnosed with vaping illnesses, according to the U.S. Centers for Disease Control and Prevention.from diseases linked to vaping.
The White House is expected to announce a ban on flavored e-cigarettes in an effort to curb the teen vaping epidemic.
“We’re going to be coming out with a very important position on vaping,” President Donald Trump said last week. “We have to take care of our kids, most importantly. So we’re going to have an age limit of 21 or so. But we’ll be coming out with something next week, very important on vaping.”
Juul also said it will cut costs by nearly $1 billion, including by laying off marketing and government affairs staff, a company spokesperson told CBS News. A bare-bones marketing team will focus its efforts on direct marketing to adult smokers. Juul also has suspended all broadcast, print and digital advertising in the U.S.
The company’s restructuring plans include ramping up efforts to reduce and prevent underage use, investing in scientific research, and investing in developing new technologies, the spokesperson said.
Juul, which hired an average of 300 people per month last year, said the layoffs are necessary to “right-size” the business. The company has more than 4,000 people, and all those who are laid off will receive separation packages, the company said.
Megan Cerullo/CBS News