In a bold move to navigate its financial struggles, genetic testing company 23andMe has announced plans to reduce its workforce by 40%, translating to approximately 200 jobs. This drastic decision comes as the company seeks to stabilize its operations following a tumultuous year marked by significant setbacks.
The company is not only cutting jobs but is also halting development on several therapeutic projects. Co-founder and CEO Anne Wojcicki emphasized the need for these changes, stating that they are essential for the long-term viability of 23andMe’s core consumer business and its research collaborations.
In her remarks, Wojcicki highlighted the necessity of these difficult decisions, framing them as critical to restructuring efforts aimed at ensuring future success.
As part of this restructuring, 23andMe anticipates incurring one-time costs estimated at $12 million (£9.3 million) related to severance payments. However, this move is projected to yield annual savings of around $35 million, providing a potential lifeline for the beleaguered company.
The challenges facing 23andMe have been compounded by security breaches. Last December, the company disclosed that hackers had accessed personal information from approximately 6.9 million users, raising concerns about data privacy and customer trust.
Moreover, the company’s stock has taken a significant hit, plummeting by over 70% this year alone. These financial struggles have intensified pressure on Wojcicki as she leads efforts to revitalize the business.
Despite these hurdles, 23andMe remains a prominent player in the growing ancestor-tracing market, known for offering DNA testing that provides customers with insights into their ancestry and personalized health information.
As 23andMe navigates through these turbulent waters, it faces critical decisions regarding its therapeutic developments. The company is currently exploring options for these projects, including potential licensing or sale opportunities.
Looking ahead, how 23andMe manages its workforce reductions and restructures its product offerings will be crucial in determining its future trajectory in the competitive genetic testing landscape.
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