Genetic Testing Firm 23andMe Announces 40% Workforce Reduction

The genetic testing company 23andMe, which is facing challenges, has announced a reduction of 40% of its workforce, equivalent to 200 positions, as part of its efforts to remain viable. The company, known for its DNA-testing services, will also discontinue development on therapeutic projects it had underway. This follows an announcement last year by the company that unauthorized individuals had accessed personal data belonging to millions of its users. The share price of 23andMe has decreased by over 70% this year, amidst attempts by co-founder and chief executive Anne Wojcicki to revitalize the company. On Tuesday, the firm informed investors of “substantial doubt” regarding its capacity to maintain operations, reporting a decline in revenue to $44m (£35m) for the July to September quarter, down from $50m during the corresponding period last year. Losses for the company decreased from $75m to $59m. These workforce reductions are projected to incur one-off expenses totaling $12m, encompassing severance payments, as part of a strategy anticipated to generate $35m in savings. Ms Wojcicki stated, “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.” Additionally, the company indicated it is evaluating options for its developed therapies, such as licensing or selling them. 23andMe holds a prominent position within the expanding ancestor-tracing sector. The company provides genetic testing services based on DNA, delivering ancestry analysis and customized health information. Its clientele features notable individuals, ranging from rapper Snoop Dogg to multi-billionaire investor Warren Buffett. The company’s valuation was approximately $3.5bn upon its listing on the Nasdaq stock exchange in 2021, at which point its share price reached a high of $17.65. However, shares have since declined and are presently trading below $5. The difficulties for 23andMe intensified last December when it verified that hackers had gained access to information pertaining to approximately 6.9 million of its users. This information, in certain instances, comprised family trees, birth years, and geographical locations. The company specified that the compromised data did not contain DNA records. The perpetrators accessed 23andMe accounts by utilizing email and password credentials that had been compromised in prior data breaches. They proceeded to download data not only from these directly accessed accounts but also the private information of all other users connected through family trees on the platform. In June, regulatory bodies overseeing data protection in the UK and Canada initiated inquiries into the breach. A statement issued at that time by the UK’s Information Commissioner’s Office declared, “23andMe is a custodian of highly sensitive personal information, including genetic information which does not change over time.” The statement further emphasized, “This makes public trust in these services essential.” Adding to the company’s difficulties, seven out of 23andMe’s eight board members resigned in September. The independent directors of the firm stated their departure was due to not receiving an acceptable buyout proposal from Ms Wojcicki. Copyright 2024 BBC. All rights reserved. The BBC bears no responsibility for the content found on external websites. Information regarding our policy on external linking is available.