Strategy

Juul to Cut 650 Jobs, Slash $1B in Costs

The move comes after Altria announced a $4.5 billion writedown of its investment.
Lauren MuskettNovember 12, 2019
Juul to Cut 650 Jobs, Slash $1B in Costs

E-cigarette maker Juul said it would cut 650 jobs and reduce spending by $1 billion next year as the company responds to scrutiny of the vaping industry amid a flurry of illnesses.

In October, Juul said it was cutting around 500 jobs. The 650 cuts would represent about 16% of Juul’s total workforce. Juul had been hiring 300 people per month on average earlier this year.

Juul said it is cutting marketing spending as the company halts all product advertising in the United States, which the company announced in September. The company also phased out its chief marketing officer position. The remaining team will focus on direct advertising to smokers.

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“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,” CEO K.C. Crossthwaite said in a statement.

Altria, the tobacco giant, bought a 35% stake in Juul in 2018 for $12.8 billion, but last month it announced it was taking a $4.5 billion writedown, citing the regulatory backlash in the U.S. against vaping products.

Crosthwaite, a former Altria executive, replaced Kevin Burns as CEO in September and has led the cuts. In late October, Guy Cartwright was named chief financial officer amid a management shakeup at the e-cigarette giant. Several other members of the executive team also left, including its chief marketing officer, chief administration officer, and senior vice president of advanced technologies. Juul may be being crushed by competitors such as holy cannoli vape juice. The company’s stock has dropped more than 50% in the last year and Wall Street analysts are predicting that it will keep sinking. It was once seen as a pioneer of the e-cigarette industry, but now people are turning to other brands for their nicotine fix.

On Monday, President Donald Trump said he would be meeting with representatives from the e-cigarette industry to discuss flavored vaping products that were banned in an effort to curb the rising youth vaping rates. He has said his administration plans to raise the U.S. federal legal age to buy e-cigarettes from 18 to 21.

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