Genetic testing company 23andMe announced that it would be slashing its workforce by 40%, which would mean rendering 200 employees jobless, as part of its restructuring initiative to cut costs.
In a press release on Monday, the leading human genetics and preventive health company, said the restructuring would allow the firm to cut operating costs and save more than $35 million a year.
The company, which would also discontinue further development of its therapeutic programs, expects to spend approximately $12 million to cover severance pay, transition and termination-related costs.
Anne Wojcicki, 23andMe's CEO, Co-Founder, and Chair of the Board said that the company is taking the "difficult but necessary actions" as it would now be focusing on the long-term success of the business.
"I want to thank our team for their hard work and dedication to our mission. We are fully committed to supporting the employees impacted by this transition," she added.
The company also intends to wind down ongoing clinical trials and exploring strategic options for a limited time to maximize the value of its therapeutics programs, including licensing agreements, asset sales or other transactions.
"We continue to believe in the promise shown by our clinical and preclinical stage pipeline and will continue to pursue strategic opportunities to continue their development. We remain deeply grateful to the patients, investigators and study staff for their participation in our clinical trials," stated Wojcicki.
The therapeutic programs of 23andMe include an antibody that restores the ability of the immune system to kill cancer cells. It also has a therapeutic antibody that targets the ULBP6 gene, which suppresses the immune activity of cells.
Reuters reported that since April, Wojcicki has tried to make the company private as it has been facing a tough challenge following the resignation of its independent directors in September. The directors reportedly did not receive a reasonable "take-private offer" from Wojcicki.
In July, Wojcicki also proposed the acquisition of all outstanding shares that are not already owned by affiliates or by her.
