Juul Labs Inc. plans to lay off 250 workers as the embattled vape maker faces fresh litigation and a trade complaint as it seeks new sources of cash.
(Bloomberg) — Juul Labs Inc. plans to lay off 250 workers as the embattled vape maker faces fresh litigation and a trade complaint as it seeks new sources of cash.
The job cuts will result in a reduction of $225 million to the company’s operating expenses, according to a spokesperson. The Wall Street Journal earlier reported the company seeks to lay off about 30% of its workforce.
On its website, the company said the changes are “aimed at reducing our operating costs and positioning us to continue to advance our mission during a period of regulatory and marketplace uncertainty.” The goal is to “maximize profitability and cash-flow generation” as Juul seeks permission from the Food and Drug Administration to market its products.
The maker of e-cigarette products had been preparing to file for bankruptcy last year before getting a financial lifeline from shareholders Nick Pritzker and Riaz Valani. The company is looking to raise about $1 billion in new funds, Bloomberg News reported earlier this month.
Closely held Juul was valued at $38 billion in 2018, when Altria Group Inc. had an investment in the company, Bloomberg reported. Altria exited its stake following steep declines in Juul’s valuation.
The company has settled with a number of states and municipalities on accusations that the company targeted minors with its products. It now faces a lawsuit in which a top shareholder is demanding Juul produce financial documents and settlement agreements.
Separately, Altria has filed a complaint against Juul with the US International Trade Commission, seeking a ban on the import and sale of some of its products, alleging they infringe on patents owned by NJOY, which Altria agreed to purchase earlier this year.
(Updates to include company statement and background in final two paragraphs.)
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