The Former Industry Leader Has Remained Engulfed In Turmoil Following Lawsuits Over Marketing Practices
Vaping giant Juul was once the most powerful and prominent player in the industry, commanding a staggering 72% market share and over $1 billion in revenue at the company’s peak. Following an acquisition by big tobacco giant Altria and a series of investigations and lawsuits into their marketing practices, the company lost nearly two-thirds of its value as it continues to struggle to navigate through an uncertain and unstable market.
Juul Labs is currently planning to lay off a third of its staff and exit multiple international markets, according to a source within the company speaking under the condition of anonymity. According to this source, the company is seeking to restructure itself following a decline in sales and increased regulatory scrutiny by authorities across the world.
These austerity measures are meant to help curb the company’s accelerated expansion leading up to the Altria acquisition, and address underperforming sales across the world. In addition to these planned cuts, the company is also reconsidering or outright scrapping plans to enter into additional markets.
The company came under fire in 2019 following accusations over their marketing practices being directed toward children. This led to a series of investigations and lawsuits across multiple states and countries and a negative shift in the company’s public perception.
Juul Labs, the manufacturer of the popular Juul vaporizer, is planning a series of deep cost-cutting measures as part of a larger restructuring effort within the company. These restructuring efforts come following a massive decline in sales following an extensive expansion effort and increased regulatory and media scrutiny.
According to an anonymous source within the company, Juul Labs is planning to significantly shrink its presence in the European market and will halt sales in Austria, Belgium, France, Portugal, and Spain. The company has had a number of issues with its expansion efforts, being blocked from entering China and India, halting sales in Indonesia, and even postponing a launch in New Zealand.
The company’s newly narrowed focus is expected to see a significant portion of its workforce laid off as a result of reduced market presence. This comes following an earlier report by The Wall Street Journal stating that the company will lay off 800 to 950 of its nearly 3,000-person workforce. It remains uncertain whether or not that figure already includes the employees in the markets it is exiting, or if additional job cuts remain.
The source within the company has stated that these measures were already in the works and are not a result of anything having to do with the current coronavirus crisis. The ongoing global pandemic has devastated an industry already rocked by negative public perception and a worldwide regulatory crackdown.
The ongoing smoking epidemic is responsible for killing millions and sickening millions more each and every year. According to data from the Centers for Disease Control, there are currently an estimated 38 million smokers in the United States alone, 16 million of whom currently face some form of smoking-related illness.
A multitude of studies has recognized the value of vaping as a proven smoking cessation aid and device. Research published in the New England Journal of Medicine found that vaping is more effective than other nicotine-replacement therapies in helping adults quit smoking and continue to remain tobacco-free.
Current research indicates that vaping is already responsible for helping thousands of adult smokers successfully quit each year. Research from University College London found that vaping helped up to 70,000 British smokers quit in just one year.
In addition to being one of the most effective smoking cessation aids available, research has demonstrated vaping to be a reduced harm alternative to smoking as well. Studies from Public Health England and the Roswell Park Comprehensive Cancer Center found that vaping is 95% and 93% safer than smoking. Public Health England has routinely stood behind and defended this figure amid unwarranted and unsubstantiated scrutiny by anti-vaping activists.
Vaping has been repeatedly demonstrated as an effective smoking cessation aid and reduced harm alternative to smoking, and current evidence indicates no risk of harm from long-term use as well. A study published by the National Academy of Sciences found that vaping is not only significantly less harmful than smoking, but there are currently no known long-term health effects associated with prolonged usage.
While not the greatest news for Juul Labs and minority owner Altria, the company’s downsizing may be a positive sign for the industry. Juul’s prominence within the industry and the public is expected to be reduced due to its perception as a bad actor.
As a result, we may see a greater diversity of market share rather than a near-monopolistic hold on an entire industry driven by a company often charged with the near-cartoonishly villainous goal to addict children. Other players in the vaping industry and community have an opportunity to create a new shift within the industry, allowing fresh players to rise and leading to an overall improvement in public perception.
What are your thoughts regarding Juuls restructuring efforts? Do you believe the vaping giant will be able to recover? Let us know what you think in the comments below, be sure to like us on Facebook and follow us on Twitter to receive all the latest vaping news!
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