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E -cigarette manufacturer JUUL will lay off 30%

E -cigarette manufacturer JUUL will lay off 30%

2022-11-14

Juul, once known as the "Apple" in the electronic cigarette industry, spent three years from 0 to 38 billion US dollars, and used three years from $ 38 billion to $ 450 million. It was rescued, but it was still seeking life.


On November 10, Jum told employees that the company had received cash injection from some of its early investors, stopped bankruptcy preparations, and was undergoing cost reduction plans. The company managers said JUUL plans to lay off about 400 people and reduce its operating budget by 30%to 40%.


This investment transaction is the first part of the rescue solution of Nick Pritzker, the heir of Hyatt Hotels, the two largest investors in JUUL, and Riaz Valani, a California investor Riaz Valani. According to media reports, Jum is discussing the company's survival issues with the two largest investors.


Since there was a dispute with the US federal regulatory agency on whether its products could stay in the US market, Juul had been preparing for possible bankruptcy applications.


Juul gets financing


JUUL said that investment and reorganization plans are a way that can move forward. The company stated that the purpose of fundraising is to enable JUUL to have a more solid financial foundation in order to continue to operate, and to discuss whether its products can continue to be sold in the US market with Federal Regulatory Agency (FDA), and can continue its product development and science Research.


The specific investment clauses are not known, but Juul said that other early investors may also participate. According to people familiar with the matter, the second part of the rescue plan is under discussion and may cover recent legal responsibilities.


According to people familiar with the matter, in another transaction, the two members of the board of directors reinstated a time loan of Juul at the end of September.


People familiar with the matter said that Jum made a re -financing of the debt, because the previous loan clause required Juul to have a lot of cash at hand, and the company also needed more cash.


The valuation of the fascinating smoke


In 2018, Jum subverted the tobacco market with its fashionable electronic cigarettes and quickly became a symbol of identity in young people. As of September 2018, Juul occupied a market share of 72%of the US electronic cigarette market, with sales of $ 2 billion in that year.


The valuation of Juul soared. In July 2018, Juul's valuation was only $ 16 billion, and after three months, it turned to $ 38 billion.


However, in late 2019, a strange type of electronic pneumonia broke out in the United States. In July, eight teenagers in Wisconsin had severe lung diseases. They had adopted electronic cigarettes before they got sick, and X -films were amazing.


How is electronic nymph pneumonia? Why is it only out of the United States? Everyone pointed the culprit to the electronic cigarette. Overnight, the popular e -cigarettes that were loved by young people became "harmful substances" in the eyes of legislators and parents.


In early 2020, the FDA promulgated the new US electronic cigarette policy on the official website. Most of the fruit -flavored electronic smoke bombs were prohibited, and only two flavors of tobacco and mints were retained. After 5 months, the FDA added new rules, requiring all electronic cigarette products, including smoke bombs. Before listing, the early approval procedures must be taken to provide a list of components of each product. Achievements.


This is a disaster for Jum. Subsequently, JUUL stopped selling fruit electronic cigarettes in the United States and stopping advertising. It is no longer one of the top electronic cigarette brands used by young people.


Since then, the valuation has also been cut all the way. At the end of 2018, it was US $ 38 billion, shrinking to US $ 16.4 billion in December 2019, and declined to US $ 10 billion in October 2020. By July this year, it would shrink to $ 450 million.


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