Recently, the CEO of Juul Labs Inc., KC Crosthwaite, announced that the company is canceling its plans for international expansion. They have also undergone a refinancing process for some of their debts and are currently struggling to keep the business afloat.
The board of directors, leadership team, and I are continuing to evaluate all options to ensure that we take the necessary steps to help us fight for our mission - a battle that has been going on for many years," said CEO KC Crosthwaite in a statement.
In the ongoing dispute with the U.S. Food and Drug Administration (FDA) over whether its e-cigarettes can remain on the U.S. market, Juul has been preparing to file for bankruptcy protection. Crosthwaite stated that the company is still considering various restructuring plans, including bankruptcy, but has not made any decisions yet.
Crosthwaite announced that the company will be laying off some employees after cancelling its plans to expand outside of the United States. He also stated that Juul has successfully refinanced its debt to allow for more time to explore longer-term options.
We firmly believe that we have a future in which millions of adult smokers around the world will be able to use Juul products," said Crosthwaite. "To make this future a reality, we must continue to fight and make difficult decisions.
In 2018, Juul disrupted the tobacco market when its stylish flash-drive shaped vaporizer drove a surge in electronic cigarette use in the United States. Since then, Juul has faced lawsuits and regulatory crackdowns. The company has attempted to repair its image by appointing a new CEO in 2019 and voluntarily discontinuing the sale of fruit flavors in the US, as well as ceasing most of its marketing activities in the country.
Juul Labs CEO KC Crosthwaite has announced that the company will be laying off employees following a decision to withdraw plans for international expansion. Juul, which had approximately 3,000 employees in 2019, has already cut two-thirds of its workforce due to declining sales and increased losses. The company currently employs around 1,200 workers, including approximately 100 outside of the US, and the impact of the latest layoff decisions on their positions is unclear at this time.
The company Juul had previously planned to expand distribution in Canada, with their latest device JUUL2 launching earlier this year and being sold online and in around three dozen stores in Toronto. Juul also plans to re-establish employees in Italy and Switzerland, where their original e-cigarettes are currently sold through local distributors.
In 2020, due to a voluntary decision to reduce marketing efforts and cease sales of their sweet and fruity flavors in the United States, the company withdrew from most international markets as a result of declining revenue. In June, the FDA ordered Juul to remove their e-cigarettes from the U.S. market, stating insufficient proof of safety. The agency subsequently suspended the order pending Juul's appeal. However, sources reveal that Juul's sales in the U.S. continued to decline, prompting the company to abandon their overseas plans.
Juul faces thousands of lawsuits accusing the company of selling its products to children. Some of these lawsuits are scheduled to go to trial next year. Disputes with the FDA have hindered Juul's ability to raise funds or obtain traditional bank loans to pay for legal settlements or court judgments.
Since last year, Juul has agreed to pay over $525 million in settlements to several states that have been investigating or taking legal action against the company. There are still pending cases, including lawsuits filed by nine other attorneys general. The company maintains that it has never targeted underage users.
According to a federal investigation released on Thursday, Juul did not make it to the list of the most popular e-cigarette brands used by high school students.
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