Juul Labs Inc. will cut nearly $1 billion US in costs next year, a company official said on Tuesday, as its new chief executive officer tries to turn around the e-cigarette maker following a regulatory crackdown.
K.C. Crosthwaite, a former executive at major shareholder Altria, is tasked with fixing the company’s battered public image and shrinking valuation as the regulatory moves on vaping threaten to upend the fast-growing industry.
The official also said Juul would cut around 650 jobs, or 16 per cent of its 4,051 strong workforce, starting Tuesday. The company had previously said it would cut 10 to 15 per cent of its workforce by the end of this year.
“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,” Crosthwaite said in a statement emailed to Reuters.
The cost cuts will impact Juul’s marketing budget and are the latest effort by Crosthwaite, who last month reshuffled the San Francisco-based company’s top management.
In October, Marlboro cigarettes maker Altria, which has a 35 per cent stake in Juul, wrote down the value of its investment by $4.5 billion, cutting Juul’s valuation by a third to roughly $24 billion.