Juul confirms plans to cut 500 jobs as it prepares for a ban on flavored pods, which make up 80% of its US sales

Aaron Holmes

Oct 29, 2019, 19:56 IST

Juul confirms plans to cut 500 jobs as it prepares for a ban on flavored pods, which make up 80% of its US sales

FILE - In this Feb. 20, 2014, file photo, a patron exhales vapor from an e-cigarette at a store in New York. Only two years ago e-cigarettes were viewed as holding great potential for public health: offering a way to wean smokers off traditional cigarettes. But now Juul and other vaping companies face an escalating backlash that threatens to sweep their products off the market. (AP Photo/Frank Franklin II, File)

Juul will cut roughly 500 jobs between now and the end of the year, The Wall Street Journal first reported Monday.
The cuts come as the e-cigarette company prepares for a proposed nation-wide ban on flavored pods, which comprise over 80% of its US sales.
Juul said in a statement to Business Insider that the coming job cuts are needed to "right-size the business," which hired an average of 300 people per month in 2019.
The e-cigarette giant will also refocus on appeasing regulators and developing new technologies.
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The federal crackdown on e-cigarettes is beginning to take a toll on the workforce at Juul Labs, which will cut approximately 500 jobs between now and the end of the year.

The job cuts, first reported by The Wall Street Journal, come as Juul prepares for a proposed federal ban on e-cigarette flavors. Non-tobacco flavors account for 80% of Juul's US sales, according to CNBC.

A Juul spokesperson confirmed the cuts in a statement to Business Insider, stating that the e-cigarette giant is thinning its staff to "right-size the business," which hired an average of 300 people per month in 2019. The cuts would account for roughly 10% to 15% of the company's workforce.

Major e-cigarette manufacturers like Juul have come under harsh scrutiny from regulators, who accused e-cigarettes of appealing to minors with candy- and fruit-flavored nicotine products and aggressive advertising campaigns. State and federal regulators have also investigated hundreds of lung illnesses related to vaping, but none have been directly tied to Juul. Juul insists its primary purpose is to help long-term smokers quit cigarettes.

Juul's new CEO, K.C. Crosswaite, who joined the company after leaving the Altria Group last month, has overhauled the company's priorities in response to backlash from regulators. Juul has halted all product advertising in the US, suspended its sales of Mango, Creme, Fruit, and Cucumber flavored pods, and has said it will comply fully with federal regulation.

Crosswaithe has also reorganized the company's government lobbying and compliance arms to focus on "earning trust with regulators, policymakers and government officials worldwide," according to the spokesperson.

"As the vapor category undergoes a necessary reset, this reorganization will help JUUL Labs focus on reducing underage use, investing in scientific research, and creating new technologies while earning a license to operate in the U.S. and around the world," Juul CEO K.C. Crosswaithe said in a statement.

As it braces for impending regulation, Juul is also exploring new gadgets, including potential Bluetooth-enabled device, the spokesperson said.