E-cigarette maker JUUL Labs is planning to lay off 650 people as it struggles with new regulatory pressures and growing concerns about the dangers of vaping. The company confirmed this week that the layoffs — which account for 16% of its workforce — are part of a downsizing process aimed at cutting costs by some $1 Billion.
The news comes 2 months after the Trump administration announced a national ban on flavored vape products. JUUL, known for its popularity among young people, relies on its mint-flavored vape pods for 70% of its U.S. sales, CBS News reports.
In a statement, JUUL’s new CEO K.C. Crosthwaite, a former executive at Philip Morris, blamed the company’s restructuring on a “necessary reset” for the entire vaping industry.
“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.
JUUL’s Layoffs Come After Nearly 50 Vaping Deaths
The layoffs are expected to cap a year that had begun on a lukewarm note. Throughout 2019, JUUL averaged 300 new hires per month, all as governments and regulatory agencies were ramping up efforts to contain the growing problem of teenage vaping.
Several states had already issued bans before the Trump administration’s proposed federal ban. Massachusetts went so far as to launch a complete, albeit temporary, ban on all vaping products.
Such actions have come in response to the soaring popularity of vaping among teens, but also amid new concerns about its health effects. Since the year began, 47 Americans have died from an unknown respiratory illness tied to some vaping products. Another 2,290 people have been sickened.
The Centers for Disease Control and Prevention (CDD) recently cited the chemical vitamin E acetate as a possible culprit. While not in commercial vaping products, vitamin E acetate is typically used to thicken or dilute THC (cannabis) vaping liquids.
More JUUL Controversy
JUUL is also facing a bevy of controversies and lawsuits over its business practices. In October, a former senior vice president sued the company, claiming it knowingly shipped a million contaminated vape pods to stores. According to that suit, JUUL refused to issue a recall or public health notice after learning of the contaminated shipment.
For its part, JUUL voluntarily ended the sale of its mint vape pods in the U.S. The move, which came mere weeks after Crosthwaite’s hiring, suggests a monumental shift in the company’s marketing and PR strategies, for which the company has been under intense fire.
JUUL Lawsuits Focus on Underage Marketing
While decorating their website with promises and campaigns to combat underage use, JUUL’s advertising for years included shameless youth-oriented imagery and messaging. In January, a Stanford study of tobacco-industry advertising revealed a calculated, years-long effort by JUUL to lure teenagers and young adults into using their products.
Meanwhile, vaping trends among adolescents have skyrocketed since the beginning of the decade. The dramatic uptick in underage vaping has been something of a wakeup call to anti-smoking advocates, who had been keen to celebrate recent declines in youth cigarette smoking.
Robert K. Jackler, a professor at Stanford Medical School and co-author of the advertising study, told the Los Angeles Times, “the way to keep from having a population of adult smokers in America is to keep young people from starting in the first place.” He continued:
“Smoking initiation is almost entirely an adolescent thing. It’s something teenagers do, and the industry knows that. The ‘new adopters’ of JUUL are teenagers. They like new technology, they like flavors — it was perfectly positioned to grab hold of a youthful audience.”
It remains to be seen how serious JUUL is about changing its marketing strategy — and if its outward-facing campaigns to reduce youth vaping are, in fact, genuine, or merely a separate campaign to improve its tarnished reputation.
As part of this week’s announced layoffs, JUUL said it plans to eliminate the position of Chief Marketing Officer. The company also agreed to pause its marketing efforts, while reserving most of its $1 Billion in spending costs to the marketing department.
