In a prepared statement, 23AndMe CEO and co-founder Anne Wojcicki said the company was "taking these difficult but necessary actions" as it focuses on "the long-term success of our core consumer business and research partnerships." (Related: Disappointing BLS report: U.S. economy only created 12,000 new jobs in October due to hurricanes and labor strikes.)
"The business restructuring is expected to substantially reduce operating expenses and result in cost savings of more than $35 million," she added. "The company expects to incur up to $12 million in costs and expenses primarily related to one-time severance, transition and termination-related costs."
23AndMe went public as a corporation in 2021 after experiencing some initial successes following the popularity of its DNA and ancestry testing products. But since its initial public offering it has struggled to find a profitable business model, since its products only really need to be purchased once.
23AndMe's shares have declined by more than 74 percent this year alone. Since November 2020, the firm's shares have lost more than 97 percent of their value.
The company reported a net loss of $667 million in its latest fiscal year – more than double the $312 million loss it posted in the fiscal year prior.
In the first half of the company's current fiscal year, covering April to September, revenues have dropped by 24 percent year-over-year, and reported net losses stand at $129 million.
Mass layoff follows management issues
23andMe has also seen management-level issues in recent months over share acquisition efforts from its CEO. In April, it was revealed that Wojcicki intended to buy all outstanding shares of the company that she did not own.
At the time, Wojcicki owned more than 20 percent of the company's total outstanding shares, which gave her 49 percent voting power. Wojcicki submitted a preliminary, conditional and non-binding proposal in late July regarding the remaining shares. In August, 23AndMe's Special Committee sent a letter to Wojcicki dismissing the offer.
"We are disappointed with the proposal for multiple reasons, including because it provides no premium to the closing price per share, it lacks committed financing, and it is conditional in nature," the committee said.
This was followed by all seven of 23AndMe's board directors resigning from their posts following continued disagreements with Wojcicki over share acquisitions and her attempts to take the company private.
"It is also clear that we differ on the strategic direction for the company going forward. Because of that difference and because of your concentrated voting power, we believe that it is in the best interests of the company’s shareholders that we resign from the board rather than have a protracted and distracting difference of view with you as to the direction of the company," they wrote.
At the time, Wojcicki claimed she was "surprised and disappointed" by the resignations, claiming that taking 23AndMe private and "outside of the short-term pressures of the public markets" is the best way forward for the company.
Wojcicki has since appointed three new independent directors to the board.
Watch this report discussing the data breach against 23AndMe that exposed the data of over seven million customers.
This video is from the GalacticStorm channel on Brighteon.com.
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