Juul Labs signage is seen in the window of a store in San Francisco, June 25, 2019.
David Paul Morris | Bloomberg | Getty Images
Juul Labs said Wednesday it’s planning to cut about 30% of its workforce as it looks to cut costs and boost profits.
The layoffs will affect roughly 250 people, reducing the company’s headcount to about 650, a company spokesperson said.
This will reduce operating expenses by $225 million, the Juul spokesperson added.
Juul – which is seeking federal authorization to keep its e-cigarette products on the market – said the cuts will improve its margins and free up cash for litigation settlements.
“Today, Juul Labs is announcing a company restructuring aimed at reducing our operating costs and positioning us to continue to advance our mission during a period of regulatory and marketplace uncertainty,” the company said in a news release.
The company later secured enough financing from early investors to avoid bankruptcy. It also announced plans at the time to lay off nearly a third of staff.
Since then, Juul has been trying to raise more capital from investors as it awaits a decision from U.S. regulators on whether its current products can remain on the market, a company spokesperson said.
Earlier this week, Juul was sued by Marlboro maker Altria Group, which previously held significant stake in Juul, for alleged patent infringement over certain e-vapor products owned by subsidiary NJOY.
In response to the suit, a Juul spokesperson told CNBC, “We stand behind our intellectual property and will continue to pursue our infringement claims.”