23andMe to Slash 40% of Staff

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Facts

  • US genetic testing company 23andMe announced that it's laying off 40% of its staff, or about 200 employees, as well as shutting down its drug development business.[1][2]
  • This comes as the company, which said the layoffs will impose a one-time $12M cost but save $35M, has reportedly seen its stock price drop more than 70% this year.[3]
  • Its revenue has also plummeted, dropping 12% to $44M in September with a net loss of $59M. Its cash on hand that month was also down to $127M from $170M three months prior.[2]
  • 23andMe's struggles have been attributed to several issues, including a lack of profitability from its one-time purchase system, followed by a failed attempt at implementing subscriptions. It also recently settled a $30M lawsuit over a data breach of 6.9M customers.[2][1]
  • This comes after 23andMe's entire seven-member independent board resigned in September over CEO Anne Wojcicki’s call to take the company private. Three new board members have since been added.[2][4]

Sources: [1]Sfchronicle, [2]Wsj, [3]BBC News and [4]New York Post.

Narratives

  • Narrative A, as provided by Youtube. While 23andMe was genuine in its pursuit to democratize the health care industry, it stretched itself too thin by attempting multiple unproven businesses simultaneously. By shifting to genetic testing without retaining a strong ancestry-focused service, it was left vulnerable and ultimately killed by federal regulation. 23andMe shouldn't have put all of its eggs into one basket without knowing they would hatch.
  • Narrative B, as provided by Facts and Arts. 23andMe was ethically compromised from the beginning, as it was funneling untold amounts of genetic information into a Google database. Its claim that all data collection was consensual was also false, as the company used its research and development clause to collect everyone's genetic material with or without permission. Even those who supported the health care democratization aspect of the company were concerned about its relationship with Big Tech.

Predictions