23andMe lays off 40% of its workforce, ends therapeutics division

23andMe has announced plans to cut 40% of its workforce, equating to over 200 jobs, and to discontinue its therapeutics division as part of an effort to reduce costs. The restructuring, revealed on Monday, will include winding down ongoing clinical trials "as quickly as practical" and exploring "strategic alternatives" for its drug development assets, including research on potential cancer treatments.

In a statement, 23andMe CEO and co-founder Anne Wojcicki explained that the company was taking these "difficult but necessary actions" in order to focus on the "long-term success" of its core consumer business and research partnerships.

This move comes amid challenging times for the California-based company, which has faced a high-profile data breach, several rounds of layoffs, and significant losses that have caused its stock to fall in recent years. In September, all of 23andMe's independent board members resigned, a rare occurrence following prolonged negotiations with Wojcicki, who has been seeking to take the company private. The resigning directors cited a "clear" difference of opinion on the company’s direction, with the CEO's proposal for taking 23andMe private not meeting their approval.

Wojcicki expressed surprise and disappointment over the resignations but maintained that taking 23andMe private, away from the pressures of public markets, would benefit the company in the long term. After over a month with Wojcicki as the sole board member, 23andMe appointed three new independent directors in late October.

The company went public in 2021 but has struggled to find a profitable business model, especially as many consumers only purchase its saliva testing kits once. In its most recent fiscal year, 23andMe reported a net loss of $667 million US, more than double the $312 million US loss from the previous year.

In its quarterly earnings report released Tuesday, the company posted a net loss of $59.1 million US for the second quarter of fiscal year 2025, down from $75.3 million US in the same quarter the previous year. However, revenue dropped to $44.1 million US, down from $50 million US a year earlier, with declines in testing-kit sales, telehealth services, and research revenue. These were partially offset by growth in membership services.

The company anticipates that the layoffs and other restructuring efforts will reduce operating expenses and save over $35 million US annually. However, it also expects to incur up to $12 million US in one-time severance and termination-related costs. As of the end of the quarter, 23andMe held $127 million US in cash and equivalents, down from $216 million US at the end of March 2024.