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23andMe slashes 14% of workforce amid slump in DNA testing market

(CNN) — 23andMe, an at-home DNA testing company, is laying off 100 people, or about 14% of its workforce, the company confirmed to CNN Business on Thursday.

News of the layoffs, first reported by CNBC, comes amid waning demand for consumer genetic testing services. The shift in the marketplace “surprised” CEO Anne Wojcicki, according to an interview she gave to CNBC.

23andMe is best known for collecting the spit of customers and using it to glean information about their genetic history, health, and physical traits based on their DNA.

It has raised hundreds of millions of dollars in venture capital and is one of tech’s “unicorn” companies, or startups valued at $1 billion or more. It’s just the latest unicorn to reevaluate its business in recent months and work to cut costs.

Wojcicki told CNBC the downsizing is a result of “what the market is ready for.” She also said privacy could be a concern that is steering people away from wanting to take its genetic tests.

She told CNBC that the tech industry needs to “better communicate privacy standards to build trust.” Wojcicki added: “I want to jump in and really own it.”

User privacy has been a growing concern across the tech industry, but the topic of privacy and genetic testing gained greater attention after a DNA search led to the 2018 arrest of the Golden State killer. The incident raised questions about who has access to genetic information.

Wojcicki also told CNBC that fear of an economic downturn could be preventing people from spending on its kits — which run $199 for a Health and Ancestry kit or $99 for Ancestry and Traits.

A 23andMe spokesperson told CNN Business the layoffs were across the company’s consumer business, but its therapeutics team was not impacted. The spokesperson said 23andMe will continue to focus on its consumer business and therapeutics, but will dial back on clinical studies.

Founded in 2006, 23andMe has experienced other growing pains over the years. In November 2013, the FDA ordered it to stop issuing health guidance to its consumers, saying it couldn’t prove that its test results were accurate. The company kept its business afloat by scaling back tests and delivering consumers raw data and ancestry information — not analysis. In October 2015, it received FDA approval to offer some health results to customers.

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