23andMe to lay off 40% of workforce amid struggles and strategic refocus

23andMe, the genetic testing company once at the forefront of consumer DNA analysis, has announced it will lay off 40% of its workforce, or roughly 200 employees, in a bid to stabilize the business.

This move comes as the company halts development on therapeutic products and narrows its focus on its core consumer DNA-testing service and research partnerships.

The layoffs will cost the company an estimated $12 million in one-time expenses, including severance, but are expected to save 23andMe around $35 million in the long term. CEO and co-founder Anne Wojcicki described the restructuring as “difficult but necessary” to ensure the future success of the company’s primary business areas.

23andMe, known for its genetic testing services that provide customers with insights into ancestry and health, has faced significant challenges recently. The company’s share price has plummeted by over 70% this year as it grapples with data security issues and a complex market environment.

Last year, a major breach exposed personal information for approximately 6.9 million users, including details like family trees, birth years, and locations—though the company confirmed that DNA records were not compromised. The hackers reportedly exploited credentials from prior unrelated breaches to access user accounts.

This breach led to ongoing investigations by data protection authorities in the UK and Canada. The UK’s Information Commissioner’s Office highlighted the unique responsibility held by 23andMe, given the sensitive nature of genetic data, and stressed the need for public trust in such services.

The company has also faced turmoil at the leadership level. In September, seven of its eight board members resigned after Wojcicki’s buyout offer was deemed unsatisfactory by the independent directors. As it seeks to stabilize, 23andMe is exploring options for its in-progress therapies, including potential licensing or sale, as it pivots back to its roots in genetic testing. The company’s customer base has included high-profile individuals like Snoop Dogg and Warren Buffett, underscoring its once-strong brand appeal. However, with recent challenges, the company now faces a pivotal moment as it seeks to secure its place in a rapidly evolving industry.