Biotechnology

Vaping giant Juul is cutting staff in corporate restructuring as scrutiny intensifies

Key Points
  • Juul Labs will cut some of its 3,900 employees, slow hiring and review its current job postings.
  • The e-cigarette startup has come under fire for marketing practices critics say target kids.
  • Tobacco giant Altria invested $12.8 billion into Juul for a 35% stake in the company in 2018.
James Monsees, co-founder and chief product officer at JUUL Labs Inc., appears before the House Economic and Consumer Policy Subcommittee which is examining JUUL's role in the youth nicotine epidemic, on July 25, 2019 in Washington, DC.
Mark Wilson | Getty Images News | Getty Images

Vaping giant Juul Labs plans to restructure and cut back its staff as state, federal and international health regulators pull its fruit flavored pods off store shelves as U.S. amid a public health crisis, CNBC has confirmed.

The company is eliminating some of its 3,900 employees, slowing hiring and reviewing its current job postings, according to a person familiar with the matter, who declined to be identified because the decision hasn't been made public.

U.S. prosecutors in California have reportedly opened a criminal probe into the maker of the popular e-cigarette. Juul's been criticized by federal health officials and lawmakers for fueling a teen vaping "epidemic." Its advertising practices have, in particular, been scrutinized for using young models and bright colors health officials say appealed to kids.

At a congressional hearing earlier Tuesday, a top U.S. health official told lawmakers that one of the ingredients Juul uses in its nicotine pods is particularly harmful to teenagers.

"Juul products use nicotine salts, which can lead to much more available nicotine," Dr. Anne Schuchat, the principal deputy director of the Centers for Disease Control and Prevention, told the House Oversight and Reform Committee's panel on consumer products. She said doctors believe the salts allow nicotine to "cross the blood brain barrier and lead to potentially more effect on the developing brain in adolescents."

Schuchat also recommended that U.S. consumers avoid all vaping products as U.S. health officials struggle to identify the cause of a deadly vaping illness that's killed at least nine people and made hundreds more ill in recent months.

The Federal Drug Administration has opened a separate criminal probe into the outbreak.

The Wall Street Journal was first to report the staff reductions. Juul declined to comment on the news.

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Juul preparing for staff restructuring as it braces for slower sales