Home DNA-testing company 23andMe is laying off 100 employees, which is around 14 percent of its workforce. The layoffs primarily affect the operations team, according to a CNBC report that was published on Thursday.
The downsizing reflects a shrinking market for DNA kits. Illumina, which makes genetic-sequencing technologies and counts 23andMe among its customers, reported that sales were down across the industry in an earnings call last summer. Genome-sequencing company Veritas Genetics also nixed its US operation last year and laid off around 50 employees after struggling to raise capital.
23andMe CEO Anne Wojcicki told CNBC that customers might be reluctant to pay for pricey genetic tests if they fear economic downturn. Wojcicki also suggested that rising consumer privacy concerns could be a reason for the downturn in sales.
Privacy has been a huge issue for genetics testing companies like 23andMe. In 2018, 23andMe and other ventures promised not to share data without consent. But advances in data analysis and growing databases have raised consumer worries over genetic privacy. Last December, the Pentagon advised military members to avoid DNA kits, citing unspecified security concerns that could risk military missions.
CNBC reports that the company recently hired a new security officer to focus on consumer privacy, and said they plan to redirect focus from their “clinical studies arm” to their direct-to-consumer and therapeutics side of the business.