We knew the Juul layoffs were coming, but they’re more severe than the company had indicated as the vaping backlash has crippled the nation’s largest e-cigarette manufacturer.
Just six months ago, San Francisco-based electronic cigarette company Juul Labs was flying high, splurging on an estimated $400 million building deal at Market and Main Streets to expand their office headquarters by fivefold. Juul’s spectacular fall from grace started just about a week later, when the SF Board of Supervisors banned vape pod sales in the city, but was accelerated over the summer when people started dying from the ‘mystery lung illness’ that reportedly affected both THC and nicotine vape product users. (The nationwide death toll now stands at 39 and counting, though the Centers for Disease Control last week called out vitamin E acetate in black-market THC vape cartridges as a likely culprit.) But the hits kept coming; Juul was dinged by the Food and Drug Administration in September for making false health claims, then sued last month over a disturbing allegation that Juul knowingly sold a million contaminated vape pods.
Now the mango-flavored vape pods are coming home to roost, as CNN reports that Juul is laying off 650 employees, or as CBS News pegs it, 16 percent of their workforce. Juul is essentially gutting the entire marketing department, and eliminating the CMO position. Juul claimed in a release this is an attempt to “right-size the business,” and as CBS News notes, the company “hired an average of 300 people per month last year.”
The marketing cutbacks come amid very credible allegations that Juul was marketing nicotine to teenagers, and indeed, the Chronicle reported that Juul was raided by the FDA last October for that very reason. Juul’s layoff announcement flouted that they would explore “new technologies to combat underage use,” including bluetooth-connected vape pens, which of course has the advantage of providing consumer surveillance and personal data monetization.
CNN describes the layoffs as part of a “$1 billion cost-cutting plan.” Marlboro cigarette maker Altria, who spent $12.8 billion to buy a 35 percent stake in Juul barely 10 months ago, wrote that investment down as a $4.5 billion loss just two weeks ago. Such haircuts are not a bad idea when you’re facing more civil lawsuits than you can count and would prefer to be seen as a less tempting billion-dollar target.
i looked through the history of sf's ballot props and it turns out that Juul made history this year! their ballot prop to overturn e-cigarette regulations got the highest percent of "no" votes ever, of *any* sf ballot measure placed by petition (aka, not by board of supes)— chris arvin 💕 🌁 (@chrisarvinsf) November 11, 2019
Juul was shellacked at the ballot box on their Proposition C attempt to undo the supervisors’ vape ban, and spent nearly $12 million for the privilege of becoming a San Francisco electoral laughingstock. Meanwhile, vape bans are catching fire in states and municipalities across the U.S. The Trump administration is even considering a nationwide ban on the sale of e-cigarettes, though in a (what else?) 6 a.m. tweet yesterday, the president said that "jobs will be a focus!" of any executive vaping decree.
Image: Vaping 360 via Flickr