Juul Labs Inc. is planning to restructure its workforce, scaling back on new hires and eliminating some jobs, according to a person familiar with the matter.
The dominant e-cigarette maker has been facing increasing scrutiny from state and federal officials amid reports of a mysterious vaping-related lung illness. This month the Trump administration proposed a ban on flavored e-cigarettes as it cracks down on what it has called an “epidemic of nicotine addiction” among young people.
The San Francisco start-up had been rapidly adding thousands of employees as part of global expansion plans. It currently employs about 3,900 people, more than twice as many as in December.
The Wall Street Journal earlier reported on the staff restructuring.
In an effort to avoid layoffs, Juul instructed managers of some divisions to identify key roles and to rotate workers to new or existing open positions. Last week the company implemented a two-week hiring freeze.
Juul has been valued at $38 billion by investors including Marlboro cigarette maker Altria Group Inc., which invested $12.8 billion in December for a 35% stake. As part of that deal, employees received a $2-billion bonus split among the 1,500 people who were on the payroll at the time.