23andMe to Cut 40% of Workforce
23andMe, the DNA-testing company, announced a significant restructuring on November 11, 2024, involving a 40% reduction in its workforce—over 200 employees—and the discontinuation of its therapeutics division. This move aims to stabilize the company's financial position amid ongoing challenges.
The therapeutics division, which was conducting human trials for two advanced drug candidates, will cease operations. 23andMe plans to wind down these trials and explore the sale of these assets. CEO Anne Wojcicki emphasized that these difficult decisions are necessary to focus on the long-term success of the company's core consumer business and research partnerships.
Financially, 23andMe reported a 12% decline in revenue to $44 million for the September quarter, with a net loss of $59 million. Cash reserves decreased from $170 million to $127 million over the same period. The company expects the restructuring to save $35 million annually.
This restructuring follows multiple rounds of layoffs since early 2023, reducing the workforce from over 800 to approximately 300 employees. Additionally, all seven independent directors resigned in September 2024, expressing disappointment over the lack of a fully financed proposal to take the company private. Three new directors have since been appointed.
The core consumer business remains unprofitable, with limited growth potential due to the one-time nature of DNA testing. Efforts to pivot to subscription sales have faced challenges, as the number of subscribers declined earlier this year compared to the previous year.
These developments highlight the difficulties 23andMe faces in achieving profitability and sustaining growth in a competitive market. The company's strategic focus now centers on its consumer services and research collaborations to navigate these challenges.
