Juul Labs Inc. is planning to restructure its workforce, scaling back on new hires and eliminating some jobs, according to a person familiar with the matter.

The e-cigarette maker has been facing increasing scrutiny by state and federal officials following reports of a mysterious illness related to vaping and a proposed ban on flavored e-cigarettes by the Trump administration earlier this month. The San Francisco-based startup had been rapidly adding thousands of employees as part of global expansion plans. The company currently employs about 3,900 people, more than double the staff count in December.

The Wall Street Journal earlier reported on the staff restructuring.

In an effort to avoid layoffs, Juul instructed managers of some divisions to identify key roles for staff to be rotated to new or existing open positions. The company already implemented a two-week hiring freeze last week.

Juul is valued at $38 billion by investors, including Altria Group Inc. which invested US$12.8 billion last December for a 35-per-cent stake. As part of the deal, employees received a US$2 billion bonus split among the 1,500 people who were on the payroll at the time. That comes out to about US$1.3 million per employee, and is to be paid out in installments based on the person’s tenure at the company.