23andMe Announces Major Layoffs and Reports Revenue Decline Amid Strategic Shift
On Tuesday, genetic testing company 23andMe reported a revenue decline for its latest fiscal quarter, following its announcement of significant workforce reductions and the closure of its therapeutics division. The company’s revenue for the fiscal second quarter dropped to $44.1 million from $50 million during the same period the previous year. However, 23andMe did report a reduced net loss, down to $59.1 million (or $2.32 per share), compared to a loss of $75.27 million (or $3.17 per share) a year prior.
As part of a restructuring plan, 23andMe revealed on Monday that it would cut 40% of its workforce, impacting over 200 jobs, and wind down all therapeutics programs and ongoing clinical trials. The company is exploring options, including asset sales and licensing agreements, to derive value from its existing therapeutic programs. CEO Anne Wojcicki expressed gratitude to the affected employees and underscored the importance of these steps to refocus on the company’s core consumer services and research collaborations.
The company’s shares have seen significant drops, falling slightly on Tuesday and down roughly 75% for the year. 23andMe has struggled with maintaining its Nasdaq listing, with shares previously below $1 until an October 1-for-20 reverse stock split. In September, all seven independent board members resigned, citing disagreements with Wojcicki regarding the company’s strategic direction. Since then, three new independent directors have joined the board.
Wojcicki has indicated her intention to take 23andMe private, emphasizing that this direction is the most viable for the company’s future. During Tuesday’s earnings call, she stated that the company had taken steps to regain Nasdaq compliance by reconstituting its board and implementing the reverse stock split. Although she did not discuss privatization plans in detail, a September SEC filing reaffirmed her commitment to pursue this path without considering third-party acquisition offers.
