US e-cigarette giant Juul Labs will lay off 500 employees by the end of the year

U.S. e-cigarette giant Juul Labs plans to lay off about 500 employees by the end of the year, according to people familiar with the matter. The troubled company is reversing its previous rapid expansion momentum due to the outbreak of a mysterious e-cigarette-related lung disease in the United States and facing increasingly stringent regulations from governments around the world.

The layoffs will be part of a broader restructuring that will also see the company cut its marketing spend and invest in new ways to reduce youth vaping.

Juul dominates the U.S. e-cigarette market. Before the e-cigarette public health crisis, the company was on track to hit $2 billion in annual revenue this year. Juul’s rapid growth prompted Marlboro maker Altria Group Inc. to buy a 35% stake in the company for $12.8 billion last year, valuing the e-cigarette maker at $38 billion.

Among Juul's various e-cigarette products, flavored e-cigarettes account for more than 80% of its sales. However, it is this kind of "fragrance" product that has special health hazards.

At a congressional hearing on September 24, a senior U.S. health official told lawmakers on the House Oversight and Reform Committee that the nicotine salts in Juul products are particularly harmful to teenagers.

“Juul products use nicotine salts, which doctors believe allow nicotine to cross the blood-brain barrier and have a greater impact on the developing brain of adolescents,” said Dr. Anne Schuchat, deputy director of the Centers for Disease Control and Prevention.

According to data from the US Centers for Disease Control, as of October 15, 1,479 cases of e-cigarette-related lung disease have been confirmed, resulting in at least 33 deaths.