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.