The vape manufacturer cannot seem to catch a break and has just announced that it will have to let go a further 250 employees, leaving it with about 650 staff members.
This is not the first time that Juul Labs has had to layoff a large chunk of its workforce in order to stay afloat. In October 2021, the firm had announced it was reducing its 2,200-person staff by half, to about 1,000, as it entered what now seems the beginning of a never ending tumultuous period.
The latest redundancies were announced last week in a statement on the company’s website. The press release explained that the aim was “to maximize profitability and cash-flow generation, while continuing to invest in our core priorities, which include delivery of high quality products to our commercial partners, ongoing development of next generation products.”
The 2018 deal with Altria was a mistake Juul has never stopped paying for
This latest move is of course the latest response to a downward spiral which started when at the height of its success and valued a significant $16 billion, Juul decided to enter a deal with tobacco giant Altria. A move which many considered a “deal with the devil” and led an already skeptical audience to believe that Juul could not care less about helping smokers quit and was just into making money. smoking cessation. As a result, this deal opened the door to multiple lawsuits, negative press and a general distrust in the brand.
Earlier this year, Juul Labs, agreed to settle thousands of lawsuits brought by over 10,000 plaintiffs accusing the company of intentionally marketing their products to youth. The federal multidistrict litigation (MDL) is referred to as “Juul Labs Product Cases” (JCCP). An official statement from Juul Labs explained that the resolution covered over 5,000 cases against Juul Labs and the company’s current and former officers and directors.
While in 2022 Juul was forced to pay $438.5 million to settle a multi state lawsuit of which each suing state received $6.8 million. This lawsuit accused Juul of having in place a non-effective age verification system for its products, due to which 45% of its Twitter followers were aged between 13 and 17.
When push came to shove, Altria abandoned ship
To add insult to injury, last March Altria ditched Juul. Due to the 2018 deal which gave Altria a 35% stake in Juul, the tobacco company had not been able to conduct any business with any other vape brand if not through Juul. And as a result of all the lawsuits and the pending PMTAs situation that Juul has faced in the last few years, Altria’s stock had dropped.
To this effect, the tobacco company swapped its minority stake in Juul Labs for intellectual property rights to some of the manufacturer’s heated tobacco prototypes. Altria chief executive, Billy Gifford, said that the move was the appropriate path forward for their business.
Among the multiple lawsuits thrown at Juul/Altria, the businesses had been jointly accused of racketeering for the way they marketed their products. Both companies maintain that they have never done such a thing, and insist that their marketing strategies have evolved drastically since the launch of Juul devices on social media. In another lawsuit, the Federal Trade Commission (FTC) alleged that the two companies had violated antitrust laws.
Meanwhile, “As difficult as this moment is,” Juul said in its statement announcing the layoffs, “we remain fundamentally optimistic about the prospects for [Juul Labs, Inc.]—a view rooted in our belief that our technology and our pipeline of new innovations represent the most valuable ever brought forward to transition adult smokers away from cigarettes while combating underage use.”
Juul to launch new device with a parental locking system
In line with this statement, last July Juul announced plans to launch a device with parental locks amongst its many attractive features. The company’s website said that the new product would offer a more consistent vape experience which competes with that of smoking, due to an innovative heating system which improves the product performance and temperature-control precision.
The new Bluetooth device also comes with a bigger and longer lasting battery, as well as a smart lighting system telling the user how much battery and e-liquid is left. The new Juul also contains newly-designed, tamper-resistant pods that improve aerosol delivery. And more importantly it will feature a Pod ID chip which is meant to prevent the use of illicit fake pods from being used in the device.
However, the most news worthy feature of the new device, has to be the mobile and web-based app which aside from the expected real-time product usage information and insights that it offers for its age-verified owners. This also enables an age-verification and locking system.
Juul has submitted its plans for the new product to the US Food and Drug Administration (FDA). The application emphasizes that its ‘next generation vapor platform’ aims to curb underage use whilst encouraging adults to make the switch from smoking to vaping. “Our next-generation vapor platform PMTA is built on new technology that advances public-health objectives and compelling science that demonstrates a clear public-health benefit, as required to secure a marketing authorization. We look forward to engaging with FDA throughout the review process while we pursue this important harm-reduction opportunity,” said Chief Regulatory Officer Joe Murillo.