Juul e-cigarette packs are listed for sale at Brazil Outlet on June 22, 2022 in Los Angeles, California.
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Juul Labs said on Thursday it received funding from early investors as it planned to lay off nearly a third of its staff to avoid bankruptcy.
“Today, Juul Labs charted the way forward with capital injection from some of our early investors,” a Juul spokesperson told CNBC. “This investment will enable Juul Labs to sustain business operations, continue to advance its administrative appeal of the FDA’s do-no-marketing order, and support product innovation and scientific development.”
The company has not released any details or terms of the investment.
Juul said moving forward and continuing operations will require a “reorganization” of its global workforce. The company plans to lay off about 400 people and cut its operating budget by 30-40%.
Juul has faced financial difficulties in recent years. In 2015, the company introduced its popular e-cigarette, touting it as a safer alternative to smoking traditional cigarettes. Since then, the company has faced many legal challenges. Juul has settled several major lawsuits brought by government agencies, mostly related to its marketing practices, which many lawsuits allege were deceptive and did not warn of the risks associated with its products.
The Food and Drug Administration ordered the company to stop selling its vaping products this year, then temporarily suspended its order in July. The headwinds hurt the company’s bottom line, and analysts predicted it could file for Chapter 11 bankruptcy protection as a way out.