Juul Labs Inc said on Thursday it had secured an investment from some of its early investors and will undertake a reorganization, including job cuts to keep its business running.
The e-cigarette maker plans to lay off about 400 people and reduce its operating budget by 30 percent to 40 percent.
The move to stop bankruptcy preparations helps the company maintain its business operations and pursue its administrative appeal of the U.S. Food and Drug Administration’s marketing denial order.
In July, the company said it was in the early stages of exploring options including financing alternatives, as it had to deal with lawsuits related to marketing of its e-cigarettes in the United States.
The financing is the first piece of a bailout package under discussion with two of Juul’s biggest investors, Hyatt Hotels heir Nick Pritzker and California investor Riaz Valani, the Wall Street Journal reported on Thursday.
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Last month, WSJ reported Juul was preparing to file for Chapter 11 bankruptcy while searching for an alternative — such as a sale, investment or loan — that could stave off a filing, citing people familiar with the matter.
By Reuters (Reporting by Deborah Sophia and Ananya Mariam Rajesh in Bengaluru; Editing by Shailesh Kuber)