The popular genetic testing company 23andMe said Tuesday that it was undertaking a major restructuring plan to slash costs, including firing 40 percent of its workforce. Airing job cuts of more than 200 employees are part of a strategy to streamline operations and concentrate on core business areas. In the wake of the layoffs, 23andMe will also put its therapeutics division on hold, ending clinical trials and closing up shop on the effort, saving about $35 million yearly, the company said.
However, CEO and co-founder Anne Wojcicki said this was a difficult decision and that ‘these actions are necessary to ensure the future success of our consumer business and research partnership.’ Wojcicki also thanked departing employees for their contributions during a tough time for the company.
23andMe faces turbulent times with workforce cuts and strategic shifts
That workforce reduction is just the latest in a series of missteps for 23andMe, which has had a tumultuous year marked by revenue attrition and a revolving door of leaders. Its revenue was $44 million in the second quarter of 2024, compared to $50 million during the same period a year ago. Due to the financial struggle, the firm has refocused efforts on its core consumer DNA testing services and research partnerships.
In September, the board of directors resigned and threw in their lot when Anne Wojcicki started plotting a private path to take the company. Part of the board, Silicon Valley heavyweights like Neal Mohan, who was YouTube’s CEO, all left in this high-profile shakeup. Mass resignation underscored the challenges in a chaotic market for 23andMe.
It’s not long after a major data breach earlier in the year. Thousands of customers had their ancestry data severely compromised when hackers infiltrated 23andMe’s systems, 23andMe severely denting customer trust. That breach has only added to worries about data privacy as the company attempts to move forward.
It’s been a difficult year for Anne Wojcicki, too: Her sister, Susan Wojcicki, died in August. Silicon Valley’s beloved Susan, former CEO of YouTube, died of a long illness. That made her death a major loss for the Wojcicki family and, by extension, to the tech community, where she was seen as an influential leader.
However, 23andMe’s stock rose slightly Tuesday, closing at $4.71 per share. However, it’s still far from its peak in 2021, when the stock traded over $300. As it plots its way back from the brink of peril, the company has an uphill battle against highly competitive rivals.
Image credit: 23andMe
