Richard Branson-backed 23andMe axes hundreds of jobs

Genetic testing company 23andMe, which is backed by Virgin billionaire Richard Branson’s VG Acquisition Corp, has revealed plans to make 200 redundancies in a bid to regain stability after a major slowdown in the business over the last year.

In cutting 40 per cent of its workforce, the company said it hopes to bounce back from its financial and operational struggles set off by a data breach and declining stock value.

These factors caused the firm’s share price to plunge by 70 per cent in the past year, to 4.67p.

The firm stated that it will also suspend development on its therapeutic branch, choosing to focus on its core customer genetic-testing services and partnerships instead.

Richard Branson-backed 23andMe hoping to save £27m

This restructuring will cost 23andMe an estimated $12m (£9.4m) with severance pay, yet could save up to $35m (£27m) overall in annual savings.

The company’s challenges rose in December last year, when hackers accessed the personal data of around seven million users, stealing sensitive data about its patients. Yet, 23andMe claimed that the DNA data itself wasn’t accessed.

The hackers had exploited email and password credentials that had been previously leaked from other sites to access the firm’s accounts and data.

The UK’s information commissioner’s office said that the nature of the firm “makes public trust in these services essential”.

Another major setback came from seven out of eight of the company’s board members resigning in September, citing dissatisfaction after the buyout offers from chief executive Anne Wojcicki.

23andMe’s chief executive Anne Wojcicki said: “We are taking these difficult but necessary actions as we restructure 23andMe and focus on the long-term success of our core consumer business and research partnerships”.