DNA-testing service 23andMe is making substantial efforts to nurse its feeble genetic core back to health. The company will lay off 40% of its workforce, over 200 employees, and cull its therapy programs that include cancer-treatment research, part of a massive restructuring plan announced Monday.
“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,” CEO Anne Wojcicki said in a statement.
The announcement comes less than two months after 23andMe’s board resigned en masse, exacerbating the company’s freefall status. Its previous board members, including Sequoia Capital’s Roelof Botha and YouTube CEO Neal Mohan, wrote in their resignation letter in September they disagreed with Wojcicki’s strategic direction for the company, including her plans to take the company private after its $6 billion valuation in 2021—its peak—plummeted to a market cap of just $150 million around their departure.
The company, which became wildly popular in 2017 due to a boom in direct-to-consumer genetic-testing tools, ultimately wasn’t able to capitalize on its 2021 merger with a special purpose acquisition company (SPAC) created by billionaire Richard Branson. SPACs were a popular pandemic-era strategy that initially juiced companies looking to go public even if they lacked sound long-term financials. The tactic was largely a failure, and 21 SPAC merger targets went bankrupt in 2023. Since23andMe’s 2021 IPO, it has never been profitable.
The firm has also been battered by a changing market and security disasters. Hit by a slowing demand for its flagship DNA-testing kit, 23andMe also contended with a massive data breach that exposed the information of 6.9 million users. Earlier this year, 23andMe tried to apply a Band-Aid through its telehealth subsidiary Lemonaid Health, offering prescriptions for GLP-1 agonists like Ozempic and Wegovy.
A Tuesday SEC filing said “there is substantial doubt about the company’s ability to continue.” A spokesperson for 23andMe did not respond to Fortune’s request for comment.
Signs of life
Despite 23andMe’s bleak prognosis, Wojcicki, who has helmed the company since its 2006 founding, has not given up.
“I think we can navigate and land this plane,” she told Fortune last month. “But it is absolutely complicated.”
The company expects its restructuring plan, which also includes exploring licensing agreements and asset sales of its therapeutics programs and winding down its clinical trials, to save it $35 million annually. Instead, it will redouble its efforts on its core product of direct-to-consumer genetic testing, as well as the sale of data from the tests to pharmaceutical developers.
“Becoming more sustainable has been a top priority,” Wojcicki told shareholders on Tuesday.
23andMe has also worked to rebuild its board, which, after the September mass resignation, included only Wojcicki, who owns 49.75% of the company. At the end of October, the firm tapped former WeWork CFO Andre Fernandez, former Redleaf Group CFO Mark Jensen, and former Cloudera, Inc. and Yodlee, Inc. CFO Jim Frankola, to join its board.
At the center of the company remains Wojcicki, who, despite being the target of grievances from her previous board, has been steadfast on her leadership skills and role in the company.
“I’ve always said ever since the very beginning, I don’t need to be in charge,” she said. “There’s no ego for me. I care about the vision and the mission.”
