23andMe, the popular genetic testing company, has announced it will lay off 40% of its workforce, affecting over 200 employees, and shut down its therapeutics division as part of a major restructuring effort. This decision comes as the company works to reduce costs and refocus on its core business areas: personalized DNA and ancestry testing, telehealth platforms, and research collaborations with other companies in the pharmaceutical industry.
CEO and co-founder Anne Wojcicki expressed that while these changes were difficult, they were necessary to ensure the company’s long-term success. She reaffirmed the company’s commitment to advancing its consumer genetics and research services, which have been central to 23andMe’s brand since its inception.
Therapeutics Division to Close Down
As part of the restructuring, 23andMe will wind down its drug development efforts, including clinical trials for two promising cancer treatments. These drugs, 23ME-00610 and 23ME-01473, had shown early promise in trials but will no longer be pursued. 23andMe will explore alternative strategic options for its research assets.
The company’s decision to halt these trials reflects a shift away from therapeutics and towards its more established consumer genetics and research partnerships. Wojcicki thanked the patients, investigators, and study staff for their involvement in the trials, adding that the company still sees potential in its clinical pipeline, though it will pursue those opportunities in a different manner going forward.
Leadership Challenges and Financial Losses
The restructuring comes amid a series of setbacks for 23andMe. The company has been struggling with significant financial losses, including a high-profile data breach that affected millions of customers. The company’s leadership has also faced challenges, including the resignation of its independent board members in September, who disagreed with Wojcicki’s plan to take the company private. The board members said they were unable to reach an agreement with Wojcicki over the company’s future direction.
After more than a month with Wojcicki as the only board member, 23andMe appointed three new independent directors in late October, stabilizing its leadership.
Struggling Financials and Business Model Shifts
23andMe has faced ongoing financial difficulties since it went public in 2021. Last year, the company reported a net loss of $667 million, a sharp increase from the previous year’s loss of $312 million. While the company’s loss in the second quarter of the 2025 fiscal year was smaller—$59.1 million compared to $75.3 million in the same period the previous year—its revenue dropped to $44.1 million, down from $50 million.
The company’s financial woes stem from the one-time nature of many of its consumer products, particularly genetic testing kits, which many customers only buy once. In response, 23andMe has been increasing its focus on growing its membership services, which have seen moderate growth but are still far from enough to offset declining product sales.
Cost-Cutting Measures to Save $35 Million Annually
In an effort to reduce costs, 23andMe expects to save more than $35 million annually following the layoffs and restructuring. However, the company anticipates that it will incur around $12 million in one-time severance and other termination-related expenses.
In addition, the company completed a 1-for-20 reverse stock split in October to meet Nasdaq’s listing requirements, after its stock price had fallen significantly. This move allowed the company to raise its share price enough to avoid a potential delisting, though it remains to be seen whether this will be enough to restore investor confidence.
Despite the challenges, Wojcicki remains optimistic about the company’s future. She emphasized that focusing on its core DNA testing services and research collaborations with pharmaceutical companies would position 23andMe for future growth. The company ended the quarter with $127 million in cash, a decline from $216 million in March 2024.
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