Juul Labs is considering significant cuts to its workforce. The Wall Street Journal on Wednesday reported that the e-cigarette manufacturer, which is part-owned by tobacco giant Altria Group (NYSE:MO), is considering reducing staff by one-third, or about 900 workers.
The move isn't related to the COVID-19 pandemic, according to the report, but instead has to do with sales challenges brought on by declining market share. Juul is also facing more regulatory burdens, with the Federal Trade Commission recently seeking to end Altria's financial investment.
The Juul investment has been a headache for Altria in recent months, spurring a $4 billion impairment charge in the company's fiscal fourth-quarter results that were announced in late January. Executives at the time outlined several changes to the terms of the partnership between the two companies following a surge in lawsuits against the e-cig producer.
Altria is due to report fiscal first-quarter results on Thursday, April 30, and investors will get their first detailed look at cigarette stock-up behavior in recent weeks. Management will likely have much more to say about the Juul investment, and the company's restructuring plans, in that announcement.