Juul Labs signage is seen within the window of a store in San Francisco, June 25, 2019.
David Paul Morris | Bloomberg | Getty Images
Juul Labs said Wednesday it’s planning to cut about 30% of its workforce because it looks to cut costs and boost profits.
The layoffs will affect roughly 250 people, reducing the corporate’s headcount to about 650, a company spokesperson said.
This can reduce operating expenses by $225 million, the Juul spokesperson added.
Juul – which is looking for federal authorization to keep its e-cigarette products available on the market – said the cuts will improve its margins and unencumber money for litigation settlements.
“Today, Juul Labs is announcing a company restructuring aimed toward reducing our operating costs and positioning us to proceed to advance our mission during a period of regulatory and marketplace uncertainty,” the corporate said in a news release.
Last yr, the vaping giant had its products ordered off the market by the Food and Drug Administration. Juul appealed the choice and the ban was reversed in the meanwhile.
The corporate later secured enough financing from early investors to avoid bankruptcy. It also announced plans on the time to lay off nearly a third of staff.
Since then, Juul has been trying to raise more capital from investors because it awaits a decision from U.S. regulators on whether its current products can remain available on the market, a company spokesperson said.
The corporate’s also been embroiled in costly legal battles, paying over $1 billion price of settlements to 45 states for its role in sparking a national surge in teen vaping.
Earlier this week, Juul was sued by Marlboro maker Altria Group, which previously held significant stake in Juul, for alleged patent infringement over certain e-vapor products owned by subsidiary NJOY.
In response to the suit, a Juul spokesperson told CNBC, “We stand behind our mental property and can proceed to pursue our infringement claims.”