Juul Labs Inc. is moving its headquarters from San Francisco to Washington, D.C., as the e-cigarette maker seeks to repair its relationship with regulators and distance itself from Silicon Valley’s growth-at-all-costs culture, according to people familiar with the matter.
The move is part of a broader restructuring plan that includes a reduction in the company’s workforce by roughly a third, the closure of some U.S. offices and a scaling back of its footprint in Europe and Asia, the people said.
Blamed for a surge in underage vaping, Juul has been cited as an example of the Silicon Valley ethos gone awry. The startup raised billions of dollars from investors, promising an alternative to cigarette smoking, but ended up beset by regulatory crackdowns, lawsuits and federal investigations into its marketing practices. Juul has said that it didn’t market to teens and that it is working to regain the public’s trust. Its U.S. retail-store sales have fallen 38% since July, according to Cowen analyst Vivien Azer.
The move of Juul’s corporate functions to Washington will put the e-cigarette market leader closer to lawmakers, public-health officials and federal regulators at the Food and Drug Administration who will soon be deciding whether Juul’s products—and the products of its competitors—can remain in the U.S. market. The company will maintain a large presence in the San Francisco area, which will remain an important hub for the company’s product and software development, the people familiar with the matter said.
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