In a dramatic turn of events, popular genetic testing firm 23andMe announced it has filed for bankruptcy protection as it faces severe financial challenges. The company's co-founder and CEO, Anne Wojcicki, has stepped down from her position immediately, marking a significant shift in leadership amid ongoing struggles.
As part of its bankruptcy filing, 23andMe will be supervised by the court as it attempts to sell the company. In a press release, the firm reassured customers that it plans to maintain operations during this sale process and emphasized that there will be no alterations to how customer data is managed or stored. However, the California Attorney General recently issued a consumer alert suggesting customers consider deleting their data in light of the company's financial instability.
Once regarded highly in the market and valued at approximately $6 billion (£4.6 billion), 23andMe has faced several hurdles since its founding in 2006 and public debut in 2021, without achieving profitability. A major setback occurred earlier this year when the company settled a lawsuit claiming it failed to secure the personal data of nearly seven million customers during a significant data breach. While DNA records were not stolen in that breach, hackers accessed sensitive information including family trees and geographical locations through outdated passwords.
A workforce reduction followed in September, with 200 positions eliminated, which accounted for about 40% of the company's employees. Joe Selsavage, the finance chief, will assume the role of interim CEO following Wojcicki's departure, but she will remain on the company's board.
The company, which once had endorsements from celebrities like Oprah Winfrey and Snoop Dogg, has struggled to innovate its business model. Attempts to create a subscription service and leverage user data for drug development have not yielded success. Wojcicki's effort to take the company private was thwarted by her unwillingness to consider a takeover offer.
Mark Jensen, the chair of the board, stated that safeguarding customer data remains a top priority and that any potential transactions will take this commitment into account. However, the news has raised concerns among users regarding the fate of their genetic data. In the UK, DNA information is classified as special category data under current data protection laws, conferring specific legal safeguards in case of business bankruptcy or ownership changes.
Concerns about the privacy of DNA information have been voiced by experts, emphasizing the value of genetic data not just to individuals, but to entire families. Professor Carissa Veliz, author of "Privacy is Power," pointed out that sharing DNA data poses risks for relatives who did not provide consent.
As 23andMe moves forward with its bankruptcy proceedings, the future remains uncertain for the company and its user base, particularly regarding the handling and safeguarding of their sensitive genetic information.
