A U.S. Food and Drug Administration decision on e-cigarettes in June led to job cuts at the Hudson, Wis., operation of medical device maker Phillips-Medisize.
The company informed the state of Wisconsin in July that it was laying off 96 employees from its St. Croix Meadows facility in Hudson.
In its letter to the state Phillips-Medisize said, "Recently, a major customer of Phillips informed the company that it will need to immediately and substantially reduce the production of its products at the St. Croix Meadows Phillips facility."
A spokesman for Juul Labs confirmed that it is the company referenced in the letter. The Washington, D.C.-based firm previously acknowledged that it contracts with Phillips-Medisize to make e-cigarette components.
In June, the FDA ordered Juul to halt U.S. sales of its e-cigarettes.
"The FDA's initial decision in June to deny the company a marketing order created a level of uncertainty that ultimately impacted jobs at partner facilities," a Juul spokesman said.
Phillips-Medisize's Worker Adjustment and Retraining Notification (WARN) letter to the state indicated that the layoffs would start "on or about July 12."
In a statement, Phillips-Medisize said that 64 of the affected employees still work for the company in other roles. All of the employees being laid off were offered jobs on a different shift or site.
According to the company's statement, "The company provided direct support to our employees, including severance packages and the opportunity to apply for roles at our other sites in Wisconsin that include New Richmond and Menomonie."
Phillips-Medisize has approximately 2,300 employees at numerous locations in Wisconsin. About 200 work at the site in Hudson.
The company's WARN letter indicated that an additional 225 layoffs were possible if "our customer informs us that a complete cessation of production is necessary." Phillips-Medisize makes vaping device components at three locations.
The once-hot vaping startup industry has been tempered by regulators in recent years. From late 2019 to late 2020, Juul cut approximately 75% of its staff.
In July, the FDA suspended its ban on Juul while the company appeals the decision.
"Juul Labs believes that once the FDA completes a full review of all of the science and evidence presented — as required by law and without political pressure — the company should receive an authorization to market its products," said a Juul spokesman.
Phillips-Medisize's primary business is making drug delivery, medical device and diagnostic products. It also makes products for the automotive, consumer and defense markets.
Phillips-Medisize completed a $63 million expansion in Hudson in 2020, building a new 285,000-square-foot, "state-of-the-art" building. When it opened the company was looking to hire 250 workers there.
Representatives of the city of Hudson did not return phone calls for comment.
Phillips-Medisize began in Phillips, Wis., in the 1960s and is now a global enterprise with numerous locations across Europe and Asia. Illinois-based electronics company Molex acquired Phillips-Medisize in 2017. Molex is owned by Koch Industries, the Kansas-based conglomerate.
