DNA testing used to be prohibitively expensive for the average consumer, but companies like 23andMe have made DNA testing kits an impulse buy. After enjoying years of modest growth, 23andMe has seen its sales drop in recent quarters. CEO Anne Wojcicki confirms the company is laying off 100 people, or about 14 percent of its workforce. She speculates privacy concerns are the driving force behind the company’s declining sales.
Wojcicki says she’s been surprised by the downward trend, but the company is committed to making changes to fit the market. This round of job cuts focuses mainly on the company’s operations division, which worked on 23andMe’s growth and scaling plans. Wojcicki also notes that the company will reorganize in the coming months to focus more on its direct sales to consumers and less on its clinical studies division.
While 23andMe doesn’t have data to confirm privacy is at the heart of the issue, that’s probably a good guess. The news in recent months has been filled with stories of police using consumer DNA testing databases to solve cold cases. In 2018, police identified Joseph James DeAngelo as the Golden State Killer, who terrorized California communities in the 1970s and 1980s. Several of DeAngelo’s distant family members had submitted DNA samples to GEDmatch, allowing police to narrow their search and get a confirmed match to DeAngelo’s DNA.
Since then, police have used DNA databases to revive other high-profile cases, and a court decision in 2019 said police were free to ransack the GEDmatch database, even if users had not agreed to make their data available. 23andMe certainly didn’t help matters when it cut a deal with drugmaker GlaxoSmithKline to use customer DNA records to develop new drugs.
We’ve seen time and time again that people are willing to give up a little privacy if there are sufficient benefits. We all still carry smartphones, even though it’s easy for apps and services to spy on our locations. And Facebook still has billions of users despite… everything Facebook does. It’s possible 23andMe just isn’t compelling enough for consumers to justify these new privacy concerns.
This is not the first bump in the road for 23andMe. Several years back, the company had to stop offering new testing in the wake of a government investigation. Regulators cited 23andMe for being fast and loose with its health reports, which showed consumers genes associated with traits and diseases that were not properly vetted. It bounced back from that mess, but it could face greater challenges if attitudes toward DNA testing have shifted.
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