650 jobs go up in smoke as troubled e-cigarette maker Juul tries to slash $1 billion in costs

Juul said last week it would halt sales of its mint-flavored nicotine pods, which were found to be the most popular flavor among high school students.

Nicotine/ smoking

Nothing seems to be going right for e-cigarette maker Juul. A company official on Monday said that the company will now be reducing its worker strength by 650 heads, up from the previously announced 500 job cuts.

The announcement is the latest in a series of mounting troubles for the company since September. Juul is trying to revamp its strategy in the face of heightened scrutiny of vaping.

Earlier last week, the company said that it would halt sales of its mint-flavored nicotine pods. The mint-flavored nicotine pods were emerged as the most popular flavor among high school students in two studies, tarnishing the company's image to a great extent.

This decision is in a bid to restructure the company and cut down the escalating operating costs. The company aims to reduce costs by $1 billion next year. Juul presently has 4,051 employees and a job cut of 650 means the company will do away with 16% of its workforce.

Juul Nicotine pods
Juul Nicotine pods displaying the warning sign juul.com

The start-up at its peak earlier this year was hiring an average 300 employees per month but the latest announcement has come as a jolt to hundreds of employees, who are not even a year old in the company. Juul said that the layoffs are in a move to resize its business. However, the strategy is being seen as the company's efforts to win back public trust.

Juul trying to rebuild image

Juul is trying to shed its image of a company that is blamed with fueling a teen vaping epidemic. In September, the company replaced it chief executive officer Kevin Burns with its longtime tobacco executive K.C. Crosthwaite.

Besides the mint-flavored nicotine pods, Juul also pulled off its other sweet flavors from its website, almost a year after it removed the flavors from convenience and vape stores.

Crosthwaite, on Tuesday, said: "The restructuring will help JUUL Labs focus on reducing underage use, investing in scientific research, and creating new technologies while earning a license to operate in the U.S. and around the world." The company also said that its advertising efforts in the future will on direct marketing and it will enforce its strategy to refrain from advertising on both television and print.

Crosthwaite, since assuming the new role, has been trying hard to reposition the company as responsible brand. He had previously worked at Altria, the tobacco company that acquired 35% stake in Juul in late 2018. The company also said that it will continue to invest more on product research. Juul is currently developing a bluetooth-connected smoking device.