DNA testing company 23andMe is laying off 40 percent of its staff and implementing a major restructuring plan in a bid to avoid bankruptcy and ensure long-term viability. This is just the latest misfortune for a company once considered a darling of the Silicon Valley economy.
TechSpot reports that home DNA testing pioneer 23andMe announced this week that it will lay off 40 percent of its total workforce as part of a comprehensive restructuring effort aimed at reducing expenses 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 a data breach and accusations of running an auto-renewal scam.
CEO Anne Wojcicki stated that the company is “taking these difficult but necessary actions” to ensure 23andMe’s long-term success. The layoffs are expected to save the company more than $35 million annually, with a one-time operating expense of $12 million for severance packages and related costs. Breitbart News previously reported that the company’s entire board of directors resigned, with the exception of Wojcicki herself.
As part of the restructuring plan, 23andMe will be discontinuing its therapeutics division, which focused on research into cancer treatments and monoclonal therapies. While the company plans to wind down in-house testing and research, Wojcicki indicated that 23andMe intends to continue its work in these areas through strategic partnerships.
Adding to the company’s woes, 23andMe suffered a data breach last year that exposed the information of customers. 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 had failed to detect the data breach for over five months.
More recently, the company faced scrutiny from the Federal Trade Commission (FTC) after customers complained about its subscription service, alleging that 23andMe auto-renewed memberships without consent and refused to issue refunds. Some users claimed that they had physically canceled their subscriptions before the end of the term but were still charged as if the cancellation had not occurred.
Read more at TechSpot here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship.
