California: The Genetic Testing Giant 23andMe is cutting 200 jobs, representing 40% of its workforce, as it embarks a massive restructuring effort to stay afloat. Once a leader in the ancestry and genetic testing space, the company has encountered financial and reputational setbacks, including a 70% drop in share value this year and a major data breach concerning millions of users.
The layoffs come with additional differences, as 23andMe will also halt its development of therapies, which the company may now sell or license to other firms. One-time restructuring costs of $12 million are expected, though the company expects these cuts will yield $35 million in savings annually.
Last December’s data breach, which compromised the personal information of nearly 7 million users, added to the company’s challenges. Though DNA records were reportedly inaccessible, sensitive data such as family trees and geographic locations was exposed. Regulatory investigations are lasting in the UK and Canada, where officials have highlighted the significance of trust in companies managing genetic information.
In September, seven of the company’s eight board members resigned, rejecting CEO Anne Wojcicki’s buyout offer and raising concerns over 23andMe’s future approach. Despite the setbacks, Wojcicki has expressed her commitment to restructuring the company, saying that, “We are taking these difficult but necessary actions as we restructure 23andMe and focus on the long-term success of our core consumer business and research collaborations.”
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