Popular DNA testing company 23andMe has filed for bankruptcy protection and will now sell itself under court supervision. In a sudden leadership shift, co-founder and CEO Anne Wojcicki has stepped down with immediate effect.

Company Assures Customers Despite Crisis

Despite its financial struggles, 23andMe insists that customer data remains safe. In a press release, the company confirmed that it will continue operating throughout the sale process. It also assured customers that data storage, management, and protection policies remain unchanged.

However, concerns over security have grown. On Friday, the California Attorney General issued a consumer alert, advising customers to delete their data due to the company’s financial distress.

From Billion-Dollar Success to Financial Collapse

Founded in 2006, 23andMe quickly gained popularity with its saliva-based DNA test kits. The company’s innovative approach attracted millions of customers and investors, pushing its valuation to $6 billion (£4.6bn).

In 2021, 23andMe went public, hoping to expand its business. However, it never turned a profit. Over time, the company struggled to generate consistent revenue and faced increasing financial difficulties.

Major Data Breach and Workforce Layoffs

In 2023, hackers breached the company’s security, exposing the personal information of nearly seven million customers. By exploiting old passwords, cybercriminals accessed family trees, birth years, and geographic locations. Fortunately, DNA records remained secure, according to the company.

As a result, 23andMe faced lawsuits and settled a legal case in September 2023. Just two months later, the company laid off 200 employees, cutting 40% of its workforce in an effort to stay afloat.

Leadership Shake-Up and Failed Business Plans

Following Wojcicki’s resignation, Chief Financial Officer Joe Selsavage will step in as interim CEO. Meanwhile, Wojcicki will remain on the board of directors.

Previously, she had attempted to take the company private but refused third-party buyout offers. Frustrated with her approach, all board members—except Wojcicki—resigned in mid-2023 after failing to receive a satisfactory buyout offer from her.

Why 23andMe Struggled to Survive

Even with endorsements from celebrities like Oprah Winfrey, Eva Longoria, and Snoop Dogg, the company failed to keep customers engaged. Since most users only needed a DNA test once, they had no reason to return.

To solve this issue, 23andMe launched a subscription service, but it failed to attract enough users. Additionally, its efforts to use genetic data for drug development did not succeed.

Now, with bankruptcy proceedings underway, 23andMe faces an uncertain future.