The genetic testing firm 23andMe said on Monday it would cut about 40%, or 200 employees, from its workforce and discontinue 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 was evaluating strategic alternatives, including licensing agreements and asset sales, for its therapies in development.
The company has been left with few options as its value has plummeted in the aftermath of a massive data breach. The DNA testing company is being investigated by British and Canadian authorities over the 2023 breach that exposed 6.9 million users’ data, including ancestry information and other personal details. The hackers first revealed that they accessed the data in October 2023, when they attempted to sell the purported data of 1 million users of Jewish Ashkenazi descent and 100,000 users of Chinese descent on a popular hacking forum.
23andMe users in the US have since filed a class action lawsuit against the company, alleging the company failed to sufficiently notify users of Chinese and Jewish descent that their information was exposed. While the company insisted the information accessed could not be “used for any harm”, lawyers representing 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, is facing a tough challenge after all of 23andMe’s board members except her resigned in September, after not receiving a satisfactory take-private offer from the CEO.
“While we continue to wholeheartedly support the Company’s mission and believe deeply in the value of the personalized health and wellness offering that you have articulated, it is also clear that we differ on the strategic direction for the Company going forward,” the board members wrote in a public letter announcing their resignation. “Because of that difference and because of your concentrated voting power, we believe that it is in the best interests 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 annualized cost savings of more than $35m.
