Vape market pioneer, Pax Labs, is already suffering the effects of the vape-lung crisis that has left thousands in hospital across the U.S. On Monday, October 21, Pax Labs broke the news that it would be laying off 65 employees; equivalent to 25 percent of its entire team.
“In light of evolving business priorities, we have made the difficult decision to part ways with 65 members of our team, or 25 percent of the organization, effective (Monday),” said Pax spokeswoman Dianne Gleason in an emailed statement to MJBiz Daily.
The Californian vape company is one of the most well-known providers of vape pens in the current market. Based in San Francisco, Pax Labs formerly conducted business alongside the Juul e-cigarette brand. However, Juul branched out into its own independent company in 2017, resulting in the end of the collaboration.
“The transaction was done to allow Juul to focus on the e-cigarette nicotine market and Pax to continue its focus on vaporization technologies for cannabis and other plant-based materials. The companies operate completely independently under separate management teams focused on their unique markets.”
Pax Labs attributed the recent dismissal of its employees to the company’s failure to meet revenue projections.
Vape company Pax Labs CEO informed employees of layoffs via letter
The unlucky individuals who lost their jobs due to the Pax Labs lay-off were on the receiving end of a letter informing them of the news. Dated October 8, 2019, the letter was written by interim Chief Executive Officer Lisa “LD” Sergi.
“In light of our recent revenue miss and commitment to financial responsibility we’re in the process of working through the requisite budget adjustments,” reads an excerpt from the letter.
The company’s decision to lay off 25 percent of its employees follows an April announcement about Pax Labs raising $420 million. No other cannabis company in the U.S. has ever raised such a colossal amount of money. Shortly after the raise was announced, former CEO Bharat Vasan told reporters that the vape company would be extending its footprint into Asia, Canada and Europe.
According to Sergi, the company still plans to expand operations, in spite of the fact that Pax Labs is kissing goodbye to 25 percent of its workforce.
“A painful but necessary part of this will be a reduction in force,” Sergi explained to employees via email after the company discovered it had fallen short of revenue projections, adding that Pax Labs’ layoffs will enable the vape company to thrive in a “more measured, strategic way.”
Recent outbreak of vape pen poisoning has rattled the vaporizing industry
Pax isn’t the only well-known company to reveal that it will be letting some of its employees go in recent times. Weedmaps has also laid off 25 percent of its workforce. During mid October, the California-based cannabis advertising company claimed that the state’s tedious roll-out of a regulated recreational cannabis market has limited their funding from outside sources.
Weedmaps CEO Chris Beals announced the job cuts via Twitter. Over 100 people were affected by the layoffs, which targeted employees in a broad scope of departments, including the News division. Sources say that approximately half of the remaining workforce will now pour their energy into product design, development and engineering.
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