Genetic testing firm 23andMe said Monday it will cut about 40%, or 200 employees, from its workforce and halt further development of all its therapies as part of a restructuring program.
“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 partnerships,” said the company’s CEO, Anne Wojcicki.
The company said it is evaluating strategic alternatives, including licensing agreements and asset sales, for its therapies in development.
The company was left with few options as its value plummeted in the wake of a massive data breach. The DNA testing company is investigated by British and Canadian authorities about the 2023 offense exposed 6.9 million users’ data, including ancestry information and other personal details. The hackers first revealed that they had accessed the data in October 2023, when they attempted to steal the alleged data of 1 million users from Jewish Ashkenazi descent and 100,000 users of Chinese descent on a popular hacking forum.
23andMe users in the US have since had a class action lawsuit against the company, alleging the company failed to adequately notify users of Chinese and Jewish descent that their information had been exposed. While the company insisted the information accessed could not be “used for any harm”, lawyers who represented the plaintiffs in the case, said the ethnicity-specific groups could amount to a “hit list”.
Wojcicki, who has been trying to take the company private since April, faces a tough challenge after all 23andMe’s board members except her resigned in September after failing to receive a satisfactory private offer from the CEO.
“While we continue to wholeheartedly support the company’s mission and deeply believe in the value of the personal health and wellness offering you have articulated, it is also clear that we differ on the strategic direction for the company going forward,” the board members said. writing. in a public letter announcing their resignation. “As a result of that difference and because of your concentrated voting power, we believe it is in the best interest of the company’s shareholders that we resign from the board.”
In July, the CEO and co-founder proposed to acquire all outstanding shares of the firm not already owned by her or her affiliates for 40 cents each.
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After Monday’s restructuring plan, the company expects annual cost savings of more than $35 million.
