The CEO of Juul Labs, Kevin Burns, has stepped down and been replaced as the company continues to weather serious legal and political storms this year.

Burns leaves the job after two years, and he will be replaced by Altria Group chief growth officer K.C. Crosthwaite, as the Chronicle and others are reporting. Altria is a part owner of Juul, and Crosthwaite had been the executive in charge of alternatives to traditional cigarettes. The company also appears to be heading for layoffs, with a source telling the Chronicle that departments have been tasked with submitted restructuring plans that include staff reductions.

In a statement ignoring the current health crisis and CDC warning connected to e-cigarettes — which is possibly connected only to black-market vaping products — Crosthwaite said, "I have long believed in a future where adult smokers overwhelmingly choose alternative products like JUUL. Unfortunately, today that future is at risk due to unacceptable levels of youth usage and eroding public confidence in our industry. Against that backdrop, we must strive to work with regulators, policymakers and other stakeholders, and earn the trust of the societies in which we operate."

Burns also issued a statement saying, "Since joining JUUL Labs, I have worked non-stop, helping turn a small firm into a worldwide business... I am grateful to be able to confidently hand the reins to someone with K.C.’s skill set, which is well-suited to the next phase of the company’s journey."

As the SF Business Times notes, Altria Group took a $12.8 billion stake in Juul Labs last year, when the company was valued at $38 billion.

Juul also said it would be suspending all broadcast and print advertising of its products, and cooperating with the FDA's ongoing guideline-writing process related to e-cigarettes.

Juul employs around 3,900 people, up from just 225 two years ago, with around 1,200 of those employees in San Francisco. As the Wall Street Journal reports, "While Juul plans to continue its expansion, the company will scale back the pace of its hiring and some jobs will be eliminated."

According to a Wells Fargo analysis of Nielsen data, Juul's sales have suffered in the last month amid the growing public health crisis connected to a still-mysterious lung illness that has claimed nine lives, including two in California. Sales for the four weeks ended on September 7 were $278 million, down from $294 million in the prior four weeks.

As both an FTC and a criminal investigation are underway involving Juul, the company is likely to continue to face legal and PR difficulties in the coming months or years — even as it continues to drop money to support a ballot measure to overturn San Francisco's local ordinance banning all e-cigarette products. As the Examiner reports, Juul just spent $7 million on the ad campaign promoting their ballot measure, bringing the total spent to around $11 million.

Meanwhile, as the Associated Press is reporting, Altria Group and Phillip Morris announced that they are calling off merger talks.

Previously: CDC Issues Broad Warning About Vaping, and SF-Based Juul Is Not Having the Greatest Summer

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