23andMe Cuts Workforce by 40% Amid Market Struggles and Security Breach

In a bid to rescue its faltering business, 23andMe plans to lay off 40% of its employees and pause its therapeutic research while grappling with the fallout from a data breach and a plunging stock price.

23andMe, the prominent DNA testing company, has announced a substantial reduction in its workforce, laying off 40% of its employees, which translates to around 200 jobs. This decision comes as the company grapples with significant financial losses and the aftermath of a major data breach that exposed personal information of millions of users. Additionally, the firm will cease development on its therapeutic projects, focusing instead on revitalizing its core consumer offerings and research collaborations.

Co-founder and CEO Anne Wojcicki expressed that these difficult decisions are crucial for 23andMe's long-term sustainability. The firm's share price has plummeted over 70% this year, leading to an urgent need for restructuring. As part of this plan, 23andMe anticipates incurring one-time costs of approximately $12 million (£9.3 million) tied to severance payments, while aiming to achieve savings of $35 million.

Last December, 23andMe disclosed a cyber attack that compromised the personal details of roughly 6.9 million users, leading to concerns over privacy and data protection, despite reassuring that DNA records were not accessed. The company's customer base includes high-profile individuals such as rapper Snoop Dogg and investor Warren Buffett, illustrating the brand's wide reach within the growing ancestry and genetic testing market.

As it reassesses its therapeutic developments, 23andMe is contemplating options such as licensing or selling existing projects, further indicating a strategic pivot toward its core services in genetic testing and ancestry tracing. With these significant changes, 23andMe aims to solidify its position amidst increasing competition and operational challenges.