Juul CEO Tells Staff That Vaping Company in Battle to Survive
Juul Labs Inc.’s leader told his employees Thursday that the company is scrapping plans for an overseas expansion, has refinanced some of its debt, and is fighting for its survival.
“The board, the leadership team and I continue to weigh all options to ensure we take the necessary steps that help us in our battle to survive—a battle that has been playing out for many years,” Chief Executive
K.C. Crosthwaite
said at an all-hands meeting with employees Thursday, according to a copy of his remarks reviewed by The Wall Street Journal.
Juul has been preparing for a possible bankruptcy filing amid a dispute with the Food and Drug Administration over whether it can keep its e-cigarettes on the U.S. market. The company is still considering various restructuring options, including bankruptcy, and no decision has been made, Mr. Crosthwaite said Thursday.
Mr. Crosthwaite said the company would cut some jobs after pulling back on plans to expand outside the U.S. Juul has also refinanced its secured debt, giving it more time to explore more long-term options, he said.
“We strongly believe that we have a future and in that future there will be Juul products available to millions of adult smokers across the world,” Mr. Crosthwaite said Thursday. “To make that future a reality, we have to continue to fight and make tough decisions.”
Juul upended the tobacco market in 2018 when its sleek, flash-drive-shaped vaporizers fueled a surge in vaping in the U.S. Regulators, school administrators and lawmakers blamed the company for a jump in underage vaping. Since then, Juul has been buffeted by lawsuits and regulatory crackdowns. The company attempted a reboot of its image, bringing on Mr. Crosthwaite as CEO in 2019, voluntarily stopping U.S. sales of fruity flavors and halting much of its U.S. marketing.
Juul, which had about 3,000 workers in 2019, has cut about two-thirds of those jobs in recent years as it confronted lower sales and deeper losses. The company has around 1,200 workers, including about 100 outside the U.S. It couldn’t be learned how many roles will be affected by the latest layoffs.
Juul had previously planned to expand distribution in Canada, where the company’s newest device, called JUUL2, was introduced earlier this year. It is available there for sale online and in about three dozen stores in Toronto.
Juul had also planned to re-establish a staff presence in Italy and Switzerland. Juul’s original e-cigarette device is sold in Italy though a local distributor. Juul’s products aren’t currently available in Switzerland.
In 2020, the company pulled out of most countries overseas as its sales fell because of a voluntary decision to scale back its marketing and stop selling its sweet and fruity flavors in the U.S.
The FDA in June ordered Juul to pull its e-cigarettes off the U.S. market, saying Juul hadn’t submitted sufficient evidence that they were safe. The agency then stayed that order pending Juul’s appeal. But Juul’s U.S. sales have since dropped, prompting the company to scrap its overseas plans, according to a person familiar with the matter.
Thousands of lawsuits have been filed against Juul, alleging that the company marketed its products to children. Some of the suits are set to go to trial next year. The dispute with the FDA has hampered Juul’s ability to raise money or secure traditional bank loans to cover legal settlements or court judgments.
Since last year, Juul has agreed to pay more than $525 million in settlements with dozens of states that investigated or brought lawsuits against the company. The pending cases include lawsuits brought by nine other attorneys general. The company has said it never targeted underage users.
In a federal survey released Thursday, Juul didn’t rank among the most popular e-cigarette brands used by middle- and high-school students. Puff Bar remained the most popular brand of e-cigarette among young people, according to the survey conducted between January and May. Puff Bar has since been ordered off the market.
Write to Jennifer Maloney at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Juul Labs Inc.’s leader told his employees Thursday that the company is scrapping plans for an overseas expansion, has refinanced some of its debt, and is fighting for its survival.
“The board, the leadership team and I continue to weigh all options to ensure we take the necessary steps that help us in our battle to survive—a battle that has been playing out for many years,” Chief Executive
K.C. Crosthwaite
said at an all-hands meeting with employees Thursday, according to a copy of his remarks reviewed by The Wall Street Journal.
Juul has been preparing for a possible bankruptcy filing amid a dispute with the Food and Drug Administration over whether it can keep its e-cigarettes on the U.S. market. The company is still considering various restructuring options, including bankruptcy, and no decision has been made, Mr. Crosthwaite said Thursday.
Mr. Crosthwaite said the company would cut some jobs after pulling back on plans to expand outside the U.S. Juul has also refinanced its secured debt, giving it more time to explore more long-term options, he said.
“We strongly believe that we have a future and in that future there will be Juul products available to millions of adult smokers across the world,” Mr. Crosthwaite said Thursday. “To make that future a reality, we have to continue to fight and make tough decisions.”
Juul upended the tobacco market in 2018 when its sleek, flash-drive-shaped vaporizers fueled a surge in vaping in the U.S. Regulators, school administrators and lawmakers blamed the company for a jump in underage vaping. Since then, Juul has been buffeted by lawsuits and regulatory crackdowns. The company attempted a reboot of its image, bringing on Mr. Crosthwaite as CEO in 2019, voluntarily stopping U.S. sales of fruity flavors and halting much of its U.S. marketing.
Juul, which had about 3,000 workers in 2019, has cut about two-thirds of those jobs in recent years as it confronted lower sales and deeper losses. The company has around 1,200 workers, including about 100 outside the U.S. It couldn’t be learned how many roles will be affected by the latest layoffs.
Juul had previously planned to expand distribution in Canada, where the company’s newest device, called JUUL2, was introduced earlier this year. It is available there for sale online and in about three dozen stores in Toronto.
Juul had also planned to re-establish a staff presence in Italy and Switzerland. Juul’s original e-cigarette device is sold in Italy though a local distributor. Juul’s products aren’t currently available in Switzerland.
In 2020, the company pulled out of most countries overseas as its sales fell because of a voluntary decision to scale back its marketing and stop selling its sweet and fruity flavors in the U.S.
The FDA in June ordered Juul to pull its e-cigarettes off the U.S. market, saying Juul hadn’t submitted sufficient evidence that they were safe. The agency then stayed that order pending Juul’s appeal. But Juul’s U.S. sales have since dropped, prompting the company to scrap its overseas plans, according to a person familiar with the matter.
Thousands of lawsuits have been filed against Juul, alleging that the company marketed its products to children. Some of the suits are set to go to trial next year. The dispute with the FDA has hampered Juul’s ability to raise money or secure traditional bank loans to cover legal settlements or court judgments.
Since last year, Juul has agreed to pay more than $525 million in settlements with dozens of states that investigated or brought lawsuits against the company. The pending cases include lawsuits brought by nine other attorneys general. The company has said it never targeted underage users.
In a federal survey released Thursday, Juul didn’t rank among the most popular e-cigarette brands used by middle- and high-school students. Puff Bar remained the most popular brand of e-cigarette among young people, according to the survey conducted between January and May. Puff Bar has since been ordered off the market.
Write to Jennifer Maloney at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
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