Juul reaches financing deal, plans to cut 30% of jobs to dodge bankruptcy

Juul Labs said Thursday it secured financing from early investors, as it made plans to lay off nearly a third of its staff in a bid to avoid bankruptcy.

“Today, Juul Labs has identified a path forward, enabled by an investment of capital from some of our earliest investors,” a Juul spokesperson told CNBC. “This investment will allow Juul Labs to maintain business operations, continue advancing its administrative appeal of the FDA’s marketing denial order and support product innovation and science generation.”

The company has not released any details or terms of the investment.

Juul said that in order for it to move forward and for operations to continue a “reorganization” of its global workforce will be necessary. The company plans to lay off about 400 people and cut its operating budget by 30% to 40%.

Juul has faced financial strains in recent years. In 2015, it introduced its popular e-cigarette, touting it as a safer alternative to smoking traditional cigarettes. Since then, the company has been saddled by a variety of legal challenges. Juul settled several large cases brought by state authorities, largely related to its marketing practices, which many suits allege were deceptive and failed to warn about the risks of its products.

The Food and Drug Administration ordered the company to stop selling its vaping products this year and then placed a temporary hold on its order in July. The headwinds hurt the company’s bottom line, and analysts predicted it might file for Chapter 11 bankruptcy protection as a way out.