Juul Lays Off 650 In $1 Billion Restructuring Plan

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Cost-Cutting Measure Comes Amid Vaping Hysteria

There has been ongoing media scrutiny and regulatory crackdown on the vaping industry following a wave of various lung-related injuries and illnesses. While illegally produced cannabis oil cartridges spiked with vitamin E acetate have been identified as the source in a majority of cases, initial reports vaguely attributed the illnesses to “vaping” which caused the ensuing hysteria.

In another bad sign for the vaping industry, industry leader Juul Labs is set to lay off 650 employees as part of a $1 billion restructuring plan. These layoffs impact over 15% of the company’s workforce and primarily affect its marketing department.

Juul Labs has struggled to maintain its position as the industry leader following the aforementioned outbreaks and a series of accusations that the companies flavored offerings appealed to children. Public health officials claim that flavors such as creme brulee and cherry may entice teens to take up vaping despite a lack of supporting evidence.

The company hopes the restructuring will better position the company to navigate new regulatory climates going forward. To date, Juul Labs has been one of the more proactive companies within the industry in regard to self-regulation and vaping education.

Shifting Regulatory Landscape

Industry leader Juul Labs announced layoffs of 650 employees as part of a $1 billion restructuring plan. The 650 positions represent about 16% of Juul’s global workforce and largely impact the companies government affairs staff and marketing department.

The move comes following an announcement in October that the company would cease lobbying efforts, as well as all print, online, and broadcast advertising. “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,” said Juul CEO K.C. Crosthwaite in a statement.

K.C. Crosthwaite is a former Chief Growth Officer at Altria, a tobacco giant that invested $12.8 billion for a 35% stake in Juul in 2018. Altria has since struggled with the minority stake, announcing it was taking a $4.5 billion writedown on the investment back in October.

Last month Juul saw the departure of four executives, including the chief marketing officer, chief financial officer, senior vice president of advanced technologies, and the chief administrative officer. The company has seen two Altria executives placed on the board since the initial investment.

Vaping Facts

Juul Labs has been an industry pioneer in terms of self-regulation and being proactive in combating underage use. Aside from voluntarily pulling all controversial flavors from retail and online outlets, the company also invested $30 million as part of an effort to directly combat underage vaping through scientific research and education.

The current data on underage vaping shows that concerns by anti-vaping activists may be overblown. A study published in the journal Nicotine and Tobacco Research found that vaping is no more of a gateway to teen smoking than alcohol or peer use.

Despite the current hysteria in the press, peer-reviewed academic research repeatedly demonstrates that vaping is a remarkably effective smoking cessation device. Vaping is so effective in smoking cessation, that research published in the journal Addiction found vaping helped up to 70,000 British smokers quit in 2017 alone.

In fact, vaping may be the single greatest tool we have at our disposal in combating the global smoking epidemic. Research from the University of Louisville found that vaping is the single most effective smoking cessation device available, more than going cold-turkey or even prescriptions.

Implications

Juul faces an uncertain future while looking toward a hostile regulatory and reporting landscape. A looming federal ban on flavored vapor products, which analysts say make up roughly 80% of the companies sales, may place the company in an even worse position than it is currently facing.

The industry and company’s image are at an all-time low as well, thanks to lazy reporting by poor journalists. Despite a clear source of the majority of outbreaks being identified, outlets continue to vaguely blame vaping at large using imagery of Juul to illustrate.

Members of the vaping industry and community must continue to remain vigilant and resolute in pushing back in the war against vaping. While major shakeups at market leaders aren’t the greatest sign for the industry at large, we must carry on to help shift the discourse and regulatory climate in a more positive direction.

How do you feel about Juul’s restructuring efforts? Are you worried about the future of the industry? We’d love to hear from you in the comments below, be sure to like us on Facebook and follow us on Twitter to receive all the latest vaping news!

(Image Credit – Pixabay – https://pixabay.com/images/id-768441/)

Dustin has been vaping for almost a decade. He found e-cigarettes in 2008 and quickly became drawn to them as an early adopter. He's been writing reviews ever since and has established himself as a well-versed authority on the subject.

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