money JUUL goes up in smoke in parts of Europe & Asia with job cuts coming
E-cigarette maker JUUL Labs Inc. is planning a new round of layoffs and considering halting sales across Europe and Asia, according to an email to staff from CEO K.C. Crosthwaite Wednesday obtained by FOX Business.
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Crosthwaite said the decision is due to "deep uncertainty around the world" from the coronavirus pandemic and an ongoing economic crisis. He also cited strong competition from regular cigarettes, noting that it has "seemingly become easier to sell combustible cigarettes than vapor products in some markets."
"This will allow Juul Labs to continue to invest in science and evidence capabilities, access control technologies and future products in our core markets that make up a vast majority of our business," Crosthwaite wrote. "While those investments will not provide short-term revenue, they will help us earn trust and build a company for the long term to advance the potential for harm reduction for adult smokers and combat underage usage."
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Croswaithe added that the move could also give the company the option to expand into potential new markets where regulations on vaping products are less strict.
"In any future markets we enter, we will ensure vapor products can compete with combustible cigarettes and we will have science and evidence-based conversations with key stakeholders prior to entry," Crosthwaite said.
The email did not disclose how many employees will be impacted by the latest round of layoffs or the specific countries impacted.
The company's leaders said the layoffs are "not an indication of the talent or the incredible work that so many" employees have done to advance the company. Crosthwait added that "taking these steps weigh on me even further under the volatile environment facing the world. However, they are the right ones to bring greater focus to advancing the potential for harm reduction in service of our mission."
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According to the Wall Street Journal, JUUL has exited South Korea, Austria, Belgium, Portugal and Spain over the past few months and is now considering pulling out of nearly a dozen more countries including Italy, Germany, Russia, Indonesia and the Philippines.
The move is expected to help JUUL focus on its core markets in the U.S., Canada and the U.K., which accounted for more than 90% of JUUL's sales in the first quarter of 2020, a person familiar with the matter told the outlet.
The Journal noted that the company currently has roughly 2,200 employees after laying off about one third of its 3,000 workers earlier this year.
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