Aug. 23 (UPI) — E-cigarette maker Juul Labs will lay off nearly a third of its workforce in a profit-boosting move, the company announced Wednesday.
The company is set to undergo a restructuring to reduce its operating costs while it seeks to pay down debt obligations, it said in a press release.
“The principal aim of this restructuring is to enable us to maximize profitability and cash-flow generation, while continuing to invest in our core priorities,” the press release said. “To deliver on this strategy, we will be substantially reducing our headcount and, unfortunately, saying goodbye to a number of highly valued team members who have made tremendous contributions to the mission.”
About 250 of Juul’s 900 employees will be terminated, CNBC reports. This will save the company an estimated $225 million.
The cost-saving measures are also meant to prepare the company as it faces expensive litigation. Earlier this month Juul reached a settlement to pay $462 million to address lawsuits in Illinois, New York, California, New Mexico, Colorado, Massachusetts and the District of Columbia.
Claimants alleged that Juul had marketed its vaping products to minors and failed to disclose the nicotine content in their products.
Juul paid two large settlements in 2022. One stemmed from claims from 30 states. Juul settled that lawsuit for $438 million. It then agreed to pay $1.7 billion to settle claims by school districts and approximately 5,000 individuals.