The Wall Street Journal reported on November 11 that the U.S. e-cigarette maker Juul Labs has received a cash injection from some early investors, avoided bankruptcy and plans to cut about a third of its global workforce, an executive said.
Juul has been preparing for a possible bankruptcy filing as the company disputes with federal regulators whether its products can continue to be sold in the U.S. market. Juul told employees on Thursday that with the infusion of fresh capital, the company has stopped bankruptcy preparations and is working on a cost-cutting plan. Juul plans to cut about 400 jobs and slash its operating budget by 30% to 40%, company executives said.
Juul calls the investment and restructuring plan a way forward. The company said the purpose of the fundraising is to put Juul on a stronger financial footing so that it can continue to operate, continue its battles with the U.S. Food and Drug Administration (FDA), and continue its product development and scientific research.
Juul was born in 2015 and became the number one e-cigarette brand in sales in 2018. In December 2018, Juul received $12.8 billion in financing from the American multinational tobacco company Altria Group, and Juul’s valuation rose straight to $38 billion.
According to public reports, Juul’s valuation has shrunk significantly due to the tightening of global regulations in the e-cigarette market.
Reuters reported at the end of July that U.S. tobacco giant Altria further cut the valuation of its stake in e-cigarette company Juul to $450 million.
Public reports show that at the end of 2018, Altria bought a 35% stake in Juul for $12.8 billion. Juul’s valuation soared to $38 billion, and it gave $2 billion to reward more than 1,500 employees. On average, each person received $1.3 million year-end bonus.
Based on the above data, after about three and a half years, Juul’s valuation has shrunk by 96.48%.
Post time: Nov-14-2022
