DNA testing company 23andMe is laying off 40 percent of its employees and implementing a major restructuring plan to avoid bankruptcy and ensure its long-term survival. This is just the latest misfortune for a company once considered the darling of the Silicon Valley economy.
tech spot report Home DNA testing pioneer 23andMe announced this week that it will lay off 40 percent of its workforce as part of a comprehensive restructuring aimed at cutting costs and focusing on the company's core consumer business. . The move comes amid declining demand for casual genetic testing and a series of recent setbacks for the company, including data breaches and accusations of auto-renewal fraud.
CEO Anne Wojcicki said the company is “taking difficult but necessary actions” to ensure 23andMe's long-term success. The workforce reductions are expected to save the company more than $35 million annually and result in a one-time operating expense of $12 million for severance and related costs. Breitbart News previously reported that the company's entire board of directors except Wojcicki himself had resigned.
As part of the restructuring plan, 23andMe will discontinue its Therapeutics division, which focuses on cancer treatment and monoclonal therapy research. Although the company plans to scale back internal testing and research, Wojcicki said 23andMe intends to continue working in these areas through strategic partnerships.
Adding to the company's woes, 23andMe suffered a data breach last year that exposed customer information. Rather than taking responsibility for the incident, the company initially blamed its customers, citing “recycled credentials” obtained by hackers in an unrelated breach. It was later revealed that 23andMe failed to detect the data breach for over five months.
23andMe recently came under scrutiny from the Federal Trade Commission (FTC) after customers complained about its subscription service, alleging that 23andMe auto-renewed memberships without their consent and refused refunds. Ta. Some users claimed that even though they physically canceled their subscription before the end of the period, they were still charged as if the cancellation had never occurred.
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Lucas Nolan is a reporter for Breitbart News, covering free speech and online censorship issues.
