Popular genetic testing company 23andMe has files for bankruptcy protection in the U.S. The company confirmed it will continue operating as it seeks a buyer under court supervision. The decision comes at a crucial moment for the company, which has faced multiple setbacks in recent months.
Anne Wojcicki, the company’s co-founder and longtime CEO, has stepped down from her role. This leadership change marks a major shift as 23andMe navigates financial instability and legal challenges.
Company Assures Customers That Data Remains Secure
Despite filing for bankruptcy, 23andMe reassured its customers that their genetic data remains safe. The company emphasized that it will maintain all existing security protocols during the transition. There will be no changes in how customer information is stored, accessed, or protected.
However, concerns about data security have grown in recent months. California’s Attorney General has issued a warning to customers, advising them to consider deleting their data. The statement follows growing fears that financial instability could impact the company’s ability to uphold its security commitments.
Once Valued at $6 Billion, Now Facing Collapse
23andMe was once a leader in the direct-to-consumer genetic testing industry. Its saliva-based DNA testing kits became extremely popular, allowing people to explore their ancestry and potential health risks. At its peak, the company was valued at $6 billion and had millions of customers worldwide.
However, recent struggles have eroded its market standing. In September, the company suffered a major data breach, exposing the personal details of nearly seven million users. The breach led to a class-action lawsuit, which 23andMe settled just two months later. This incident significantly damaged consumer trust and impacted sales.
Financial difficulties escalated further in November when the company laid off 200 employees, cutting 40% of its workforce. This drastic reduction was an attempt to stabilize operations amid declining revenue and increased legal costs.
Bankruptcy Filing and Leadership Shakeup
The company filed for bankruptcy under Chapter 11 protection, allowing it to restructure its debts while continuing to operate. As part of this restructuring, 23andMe has put itself up for sale, hoping to find a buyer to secure its future.
CEO Anne Wojcicki, who co-founded the company in 2006, resigned immediately following the bankruptcy announcement. She had been a central figure in the company’s growth and innovation. Despite stepping down as CEO, Wojcicki will remain on the board of directors.
Joe Selsavage, the company’s Chief Financial Officer, has been appointed interim CEO. He will lead the company through the bankruptcy process and oversee efforts to find a buyer.
What This Means for Customers
For existing customers, 23andMe assures that services will continue without interruption. Those who have already purchased DNA testing kits can still expect results. However, the uncertainty surrounding the company’s future has raised concerns about long-term support and data privacy.
Customers who are uneasy about the situation may choose to delete their accounts. 23andMe provides an option for users to remove their genetic data from the company’s servers, a process that can be done through the online platform.
The Future of Genetic Testing Companies
The bankruptcy of 23andMe highlights the challenges in the genetic testing industry. While consumer DNA testing became a booming business in the early 2010s, concerns over privacy, security breaches, and long-term data use have slowed the industry’s growth.
Competitors like Ancestry.com have also faced declining demand as consumers become more cautious about sharing sensitive genetic data. This trend suggests that the industry may need to adapt by improving security measures and offering more transparency in how genetic data is handled.
A Turning Point for 23andMe
As 23andMe seeks a buyer, the company faces a critical moment. Whether it finds a financial partner to rescue it or fades from the market remains uncertain. For now, its customers, employees, and investors will closely watch how the situation unfolds.
The bankruptcy filing marks a dramatic turn for a company that once revolutionized the genetic testing industry. With new leadership and the hope of a sale, 23andMe enters an uncertain but pivotal phase in its history.