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Juul ousts several top executives, names new CFO amid management shakeup

Juul ousts several top executives, names new CFO amid management shakeup

Juul ousted a number of top executives as new CEO K.C. Crosthwaite, a former Altria executive, shakes up management of the embattled e-cigarette company, according to people familiar with the matter.

Chief Administrative Officer Ashley Gould and Chief Financial Officer Tim Danaher, two veteran employees at the young start-up, were let go. Newcomers Craig Brommers, chief marketing officer, and David Foster, senior vice president of advanced technologies, also left.

Juul appointed Guy Cartwright as its new CFO, a Juul spokesman confirmed to CNBC. Cartwright joined Juul in July as an executive transformation and operations officer, according to his LinkedIn profile.

"Over the past 3 months, Guy has been instrumental in helping us define our financial priorities and identify opportunities for efficiency," a spokesman said in a statement.

Juul has eliminated the chief marketing officer position, according to a company spokesman. It was not immediately clear whether Juul would fill Gould and Foster's positions. Co-founders James Monsees and Adam Bowen, who formerly held the positions of chief product officer and chief technology officer, respectively, will join a newly formed founders office, where they will advise Crosthwaite.

The changes were announced in an email sent Monday to employees. They come as Juul prepares to cut about 500 jobs, or about 10% to 15% of its total headcount, by the end of the year. Before the cuts, Juul boasted about 4,100 employees.

"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," Crosthwaite said in a statement.

The ousters come just a month into K.C. Crosthwaite's tenure. The longtime Altria executive replaced former Juul CEO Kevin Burns, who steered the company through its deal with Altria. The tobacco giant invested $12.8 billion in Juul in December.

The deal sent Juul's valuation soaring to $38 billion. It prompted intense criticism from public health advocates who said taking money from the U.S.' top cigarette manufacturer undermines Juul's stated mission to help eliminate smoking.

The situation has quickly worsened for Juul in the nearly year since announcing the deal. At least one hedge fund has reportedly slashed the value of its stake in Juul to a price that values the e-cigarette maker at $24 billion.

The Trump administration has said it will remove all flavored e-cigarettes from the market amid a surge in teen use. Local and state governments are tightening restrictions and in some cases, banning e-cigarettes outright. Retailers like Walmart, Walgreens and Kroger are pulling the products from shelves.

Juul is facing mounting litigation. The company is the subject of numerous investigations, including one from a House panel that Rep. Raja Krishnamoorthi is leading. The committee grilled Gould, one of the executives being removed, about Juul's youth outreach program that sent company representatives into schools.

Crosthwaite, the new Juul CEO, is tasked with turning Juul's fortunes around. Under his leadership, the company has suspended all product advertising in the U.S. and stopped selling Juul's sweet flavors like mango and fruit. Juul has also said it will not lobby the Trump administration on its looming flavor policy.

Crosthwaite poached former Altria colleague to lead Juul's regulatory efforts. Murillo will focus on preparing and filing Juul's application to the Food and Drug Administration to keep selling its e-cigarettes. All companies will need to submit their products to the FDA for review by May 2020.