23andMe Files for Bankruptcy: A Struggle for Survival Amid Data Privacy Concerns
23andMe, the genetic testing company renowned for its home DNA testing kits, has filed for bankruptcy protection in a significant attempt to sell itself amid increasing concerns over the security of millions of customers' genetic data. The announcement, confirmed late on Sunday, reveals that the firm has initiated voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the Eastern District of Missouri. Mark Jensen, chair of the company’s board of directors, stated that this decision aims to facilitate a sale process to maximize the business's value.
In conjunction with this filing, 23andMe also announced the resignation of its co-founder and CEO, Anne Wojcicki. Since establishing the company in 2006, Wojcicki expressed her disappointment regarding the bankruptcy decision on X, affirming her intention to bid for 23andMe's assets during the restructuring process. "If I am fortunate enough to secure the company’s assets, I remain committed to our long-term vision of being a global leader in genetics," she stated.
Once valued at an astonishing $6 billion, 23andMe's worth has drastically declined in recent years, largely attributed to a significant drop in orders. A data breach in 2023 adversely affected approximately half of the company’s more than 15 million customers, raising substantial concerns regarding the security of the sensitive genetic information in their possession. California's Attorney General, Rob Bonta, recently issued a consumer alert, emphasizing the state’s robust privacy laws that empower consumers to control and request the deletion of their genetic data.
"Given 23andMe's reported financial distress, I remind Californians to consider invoking their rights and directing 23andMe to delete their data and destroy any samples of genetic material held by the company," Bonta warned.
In addition to the bankruptcy proceedings, 23andMe disclosed plans to lay off 200 employees, accounting for nearly 40% of its workforce, exacerbating concerns for both staff and customers. With Wojcicki stepping down, CFO Joe Selsavage will take over as the interim CEO as the company navigates this precarious period.
The fate of 23andMe hangs in the balance as it works to restructure and regain trust amidst the financial turmoil and privacy concerns that have plagued the company. As the restructuring efforts unfold, the implications for consumer data security and the future of personal genetic testing hang in the air.
Related Sources: