23andMe, a prominent DNA testing company, has filed for bankruptcy protection following a series of challenges, including a lawsuit settlement and significant workforce reductions. The California-based firm – once worth $6 billion (£4.6bn) on the back of its popular saliva-based test kits – is now facing bankruptcy. In response, co-founder and CEO Anne Wojcicki has stepped down.
Meanwhile, in September, 23andMe settled a long-standing lawsuit. The case claimed that the company’s failure to maintain the privacy of almost seven million patrons led to significant repercussions. Adding to the calamity, 23andMe disclosed in September that they would be laying off around 200 employees, a whopping 40% of their staff. This ruling was issued only two months after the settlement of the lawsuit.
Under a shroud of financial chaos, the company’s high-level executive carousel has continued to spin. BIO Anne Wojcicki stepped down as CEO effective immediately, but will remain on the board. In her place, Joe Selsavage, the current finance chief, will serve as interim chief executive.
Further compounding the company's challenges, the Attorney General in California issued a consumer alert advising customers to delete their data from the site due to 23andMe's reported financial distress. 23andMe reassured its customers by stating:
"There are no changes to the way the company stores, manages, or protects customer data." – 23andMe
Once celebrated among customers and investors for its innovative DNA testing kits, 23andMe's reputation and financial status have taken a considerable hit. Heightened consumer demand compounded with investor excitement about the company’s mission cross-pollinated to raise the company’s valuation to its all-time high. Recent challenges have upended that success.