Massive Layoffs Due to Sharp Decline in Sales of E-Cigarette 'Juul'... Withdrawal from Business in 11 Countries

Business Restructuring Focused on the US, Canada, and the UK, Accounting for 90% of Sales

▲Fruit-flavored electronic cigarettes Juul are displayed on the shelf. [Image source=AP Yonhap News]

[Asia Economy Reporter Kwon Jaehee] The U.S. liquid-type e-cigarette brand 'JUUL' is undergoing another large-scale layoff. It plans to withdraw from 11 countries in Europe and Asia and reorganize its business focusing on the U.S., Canada, and the U.K.

According to the Wall Street Journal (WSJ) on the 2nd (local time), JUUL announced that it will reduce its workforce further this year in response to a sharp decline in sales. However, the scale of the layoffs has not been disclosed.

JUUL CEO Kross White said in an email to employees that "the business units currently under review for layoffs are not generating enough revenue to support additional expenditures," adding, "The funds secured through these layoffs and business downsizing will be invested in new product development and research that can help prove to regulators that JUUL products are less harmful than traditional cigarettes."

Founded in 2015, JUUL rapidly grew to become a 'dark horse' in the tobacco industry, but sales plummeted after the U.S. Centers for Disease Control and Prevention (CDC) announced a surge in mysterious lung illnesses believed to be caused by e-cigarette use. Negative public opinion toward JUUL intensified, especially as most of these lung illness patients were teenagers, leading to the resignation of CEO Kevin Burns in September last year.

After Kross White took over as CEO, JUUL halted most of its advertising in the U.S. and laid off about 1,500 employees. It also stopped selling sweet and fruit-flavored tobacco products domestically.

CEO Kross White stated, "While these investments may not provide short-term profits, they will help earn consumer trust and rebuild the company in the long term."

Currently, the U.S. e-cigarette market is seeing JUUL's position weaken as Reynolds American's 'Vuse' increases its market share.

Accordingly, JUUL laid off about one-third of its employees earlier this year and has recently withdrawn from countries including South Korea, Austria, Belgium, Portugal, and Spain over the past few months.

JUUL also announced that it is considering withdrawing from about 10 countries, including Italy, Germany, Russia, Indonesia, and the Philippines, along with the current layoffs.

WSJ, citing sources familiar with the matter, reported, "More than 90% of JUUL's sales in the first quarter came from the U.S., Canada, and the U.K.," adding, "Future business will also be reorganized focusing on these regions."

Bonnie Herzog, a Goldman Sachs analyst, analyzed, "JUUL's U.S. market share plummeted from 75% to 58% after criticism over underage smoking spread and the company stopped selling fruit and sweet-flavored tobacco products."

This content was produced with the assistance of AI translation services.