Juul to cut staff, slash spending $1b

Juul Labs, the biggest marketer of e-cigarettes, said Tuesday that it will eliminate about 650 jobs, or about 16 percent of its global workforce, and slash spending by about $1 billion, as the US government prepares new regulations to curb the use of e-cigarettes.

Earlier, San Francisco-based Juul said it expected to reduce its workforce by 400 to 600 employees. The company had hired about 300 employees each month as its staff increased to about 4,000.

The deeper job cuts suggest the negative publicity surrounding lung injury cases has hit sales harder than anticipated, or the company expects sales to decline sharply.

Besides the job cuts, Juul will trim spending by nearly $1 billion, including significant cuts in marketing and lobbying efforts. Juul has agreed to pause its marketing effort as regulators claim the company was trying to push its products on teens.

In Detroit, doctors at Henry Ford Hospital performed a double-lung transplant on a person with a severe vaping-related injury, believed to be the first procedure stemming from e-cigarette use in the US.

The US Centers for Disease Control and Prevention (CDC) said 2,051 cases of lung injury have been reported in 49 states and the District of Columbia through Nov 5. Only Alaska has not reported a case. Thirty-one deaths in 24 states and the District of Columbia have been reported.

Juul expects a further decline in sales after ending mint-flavored refill pods that account for about 70 percent of its US sales. Last year, the company voluntarily ended the retail sale of sweet and fruity flavors but continued to offer the flavors on its website until last month.

The company has been blamed for a 47 percent increase in teenage vaping. There are now about 5.3 million high school and middle school students who use e-cigarettes, compared with 3.6 million student users last year, two surveys published this month in the Journal of the American Medical Association found.

Last week, US President Donald Trump said he planned to announce regulatory changes for e-cigarettes but gave no details. "We have to take care of our kids," he told reporters at the White House.

The new regulations may ban all e-cigarette products except those that taste like tobacco and menthol, a revision of an initial plan to remove all flavored vaping products from the market.

Initially, vaping was believed to be less hazardous than cigarettes because the flavor pod is heated and not burned. That avoided the toxins created by burning tobacco and the paper wrapping in cigarettes. Health officials have not identified the cause of the lung injuries, but the only common thread is that patients reported the use of e-cigarettes.

The cause of the injuries and deaths isn't known, but the CDC said both appear to be related to THC-infused products and not tobacco or flavored vaping products. THC is the active ingredient in marijuana that gives users a "high" or "buzz".

Investigators believe vitamin E acetate, an oil used as a thickening agent in food, dietary supplements, skin creams and present in some vaping products, may be the cause of the of the lung damage. But they cautioned that the evidence is tentative, and further research is needed.

Contact the writer at scottreeves@chinadailyusa.com