Juul Labs announced on Wednesday it was ‘saying goodbye to a number of highly valued team members’ to account for upcoming litigation settlements and as a hedge against economic and compliance-related headwinds.
In a statement sent to FOX Business, the company said that it aimed the restructuring at reducing operating costs and positioning during a period of regulatory and marketplace uncertainty.
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"The principal aim of this restructuring is to enable us to maximize profitability and cash-flow generation, while continuing to invest in our core priorities, which include delivery of high quality products to our commercial partners, ongoing development of next generation products, engagement with FDA regarding our pending and possible future market authorization applications, and commercial growth consistent with compliance with all applicable laws and regulations," according to the statement.
"To deliver on this strategy, we will be substantially reducing our headcount and, unfortunately, saying goodbye to a number of highly valued team members who have made tremendous contributions to the mission," the statement continued.
While the e-cigarette and vaping company did not say how many employees would be impacted by the decision, the Wall Street Journal reported that the job cuts will impact 250 people, reducing Juul’s overall workforce to roughly 650 people.
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Over the last six months, Juul Labs has been rocked by layoffs and a $462 million lawsuit to settle claims that it unlawfully marketed nicotine products to minors.
The company subsequently agreed to secure its products behind retail store counters and verify the ages of consumers who directly sell or promote its products online.
Juul has now reached settlements totaling roughly $1.1 billion with 46 states plus the District of Columbia and Puerto Rico, according to the Wall Street Journal.
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Using saved money from the job cuts, Juul Labs said it will be positioned to increase its margins while generating "meaningful free cash flow before litigation settlements."
"As difficult as this moment is, we remain fundamentally optimistic about the prospects for JLI – a view rooted in our belief that our technology and our pipeline of new innovations represent the most valuable ever brought forward to transition adult smokers away from cigarettes while combating underage use," the statement concluded.
