E-cigarette maker Juul is planning to pull out of several markets in Europe and Asia, including the Philippines.
Juul will pull out of several European and Asian countries, as well as lay off additional workers after it already reduced its workforce by one-third. The e-cigarette manufacturer may stop selling in 11 markets, including Italy, Germany, Russia, Indonesia and the Philippines.
In the first quarter of this year, 90% of the company’s sales came from the US, Canada and the UK.
The market exits will be accompanied by layoffs but Juul has not announced any particular number of job cuts.
In an email sent to staff by Juul chief executive officer (CEO) Kevin Crosthwaite, the layoffs will allow the firm to invest in new product development. He said: “While those investments will not provide short-term revenue, they will help us earn trust and build a company for the long term.”
Challenges to Juul
Juul have faced various issues in the past months. Government initiatives in countries like Malaysia and the Philippines to heavily tax vaping products have caused problems for the company.
E-cigaretes are also being perceived as a dangerous alternative to cigarettes.
In 2019, stopped selling several of its flavored e-cigarettes in the US after US President Donald Trump announced that the US Food and Drug Administration (FDA) will issue guidance which would effectively remove all flavors from the market, including mint and menthol.
Crosthwaite said he is hoping that the initiative could help them build trust in the vaping industry.
“We must reset the vapor category by earning the trust of society and working cooperatively with regulators, policymakers, and stakeholders to combat underage use while providing an alternative to adult smokers,” the Juul CEO added.
Additionally, a potential deal with Altria, owner of the Marlboro brand, was blocked by the Federal Trade Commission (FTC) in April. In December 2018, Altria acquired a 35% stake in Juul for $12.8 billion, raising the startup’s valuation to $38 billion.