In an alarming move for the genetic testing industry, 23andMe has announced it will lay off 40% of its workforce, equating to around 200 jobs, as the company grapples with a range of challenges. Co-founder and CEO Anne Wojcicki stated that the firm will also cease the advancement of therapies it had previously been developing, emphasizing a shift in focus towards improving the core consumer business and strategic research partnerships.
This restructuring comes in the wake of severe financial troubles, as highlighted by a staggering 70% decline in the company's share price this year. In addition, the company reported incurring significant one-off costs of $12 million related to severance pay, even as it aims for an annual saving of $35 million.
The decision follows a major security breach that occurred last year, where hackers accessed personal information of approximately 6.9 million users. This breach raised concerns about data security, although 23andMe clarified that DNA records were not compromised. High-profile clients such as Warren Buffett and Snoop Dogg have previously used 23andMe's services, adding a layer of scrutiny to the company’s current predicaments.
As the company maps out its future direction, it is also exploring options for its stalled therapies, potentially considering licensing or selling these projects. With ancestry tracing and personalized health insights as its primary offerings, 23andMe is attempting to reposition itself within the rapidly evolving genetic testing landscape. Whether these measures will successfully stabilize the company remains to be seen, but they represent a pivotal moment for 23andMe amidst turbulent backgrounds and changing consumer needs.
