Juul secures new funding to avoid bankruptcy, plans to cut jobs
Juul Labs on Thursday said it has secured enough new financing to avoid bankruptcy, but warned of an upcoming "reorganization" that will include layoffs.
Details: The company has received "an investment of capital from some of our earliest investors" a Juul spokesperson told Axios.
- "This investment will allow Juul Labs to maintain business operations, continue advancing its administrative appeal of the FDA’s marketing denial order and support product innovation and science generation."
- "Looking ahead, Juul Labs remains committed to advancing its mission of harm reduction for adult smokers while combating underage use," the spokesperson said.
Details of the new financing, which was first reported by the Wall Street Journal, were not disclosed.
What's next: The company also said it will be "undertaking a reorganization," which will include "the difficult but necessary step of separating from many valued colleagues," the spokesperson said.
- The company told employees Thursday that it will look into cost-saving measures, which may include layoffs of about 400 people (or one-third of its global staff), according to the Wall Street Journal.
The big picture: Talks of bankruptcy began amid the company's ongoing dispute with the FDA, which ordered this past summer for Juul's e-cigarettes to be taken off the shelves in the U.S. market.
- The FDA said at the time that Juul had not submitted enough information to prove that their products were safe for consumption.
- In response, Juul filed a lawsuit against the FDA, saying the regulators withheld documents that supported its own order.