Juul Labs said that it secured financing from early investors, as it made plans to lay off nearly a third of its staff in a bid to avoid bankruptcy, CNBC reported. The company has not released any details or terms of the investment. Juul said that in order for it to move forward and for operations to continue, a “reorganization” of its global workforce will be necessary. The company plans to lay off about 400 people and cut its operating budget by 30% to 40%. In 2015, it introduced its popular e-cigarette, touting it as a safer alternative to smoking traditional cigarettes. Since then, the company has been saddled by a variety of legal challenges. Juul settled several large cases brought by state authorities, largely related to its marketing practices. The deal came ahead of a new report from the Food and Drug Administration and the U.S. Centers for Disease Control and Prevention that said e-cigarettes were the most commonly used tobacco product among middle and high school students in 2022. Overall, nearly 3.1 million students used tobacco products this year, and more than 2.5 million used e-cigarettes. The FDA ordered Juul to stop selling its vaping products this year, then placed a temporary hold on its order in July. The headwinds hurt the company’s bottom line, and analysts predicted it might file for chapter 11 protection as a way out.
