August 23 (UPI) — Juul Labs, the prominent e-cigarette manufacturer, announced on Wednesday that it would lay off a significant portion of its workforce as part of a strategic move to enhance its profitability.
In a press release, Juul Labs stated that it intends to undergo a restructuring process to decrease operating costs while simultaneously addressing its debt obligations.
“The primary objective of this restructuring is to maximize profitability and generate cash flow while continuing to invest in our core priorities,” stated the press release. “To accomplish this, we will considerably reduce our workforce and, regrettably, have to bid farewell to numerous valued team members who have made remarkable contributions to our mission.”
Approximately 250 of the 900 employees at Juul Labs will be laid off, as reported by CNBC. This move is estimated to save the company around $225 million.
Aside from the profit-boosting aspect, the cost-saving measures are also intended to prepare the company for the costly litigation it is currently facing. Earlier this month, Juul Labs reached a settlement agreement, agreeing to pay $462 million to address lawsuits in various states, including Illinois, New York, California, New Mexico, Colorado, Massachusetts, and the District of Columbia.
The lawsuits accused Juul Labs of targeting minors through its marketing of vaping products and failing to disclose the nicotine content. In 2022, Juul Labs already paid two significant settlements, one amounting to $438 million to resolve claims from 30 states, and another totaling $1.7 billion to settle claims from school districts and thousands of individuals.
According to a 2022 report by the Centers for Disease Control and Prevention, an estimated 2.55 million middle and high school students in the United States reported using e-cigarettes.
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