It looks like blood-testing company Theranos is wrapping up a tough year with even more dire news. The company announced, last night, plans to lay off nearly half of its workforce as part of its strategy to exit the blood test administering business.
This equates to about 340 people.
In an open letter, founder and CEO Elizabeth Holmes explains, “After many months spent assessing our strengths and addressing our weaknesses, we have moved to structure our company around the model best aligned with our core values and mission.”
She goes on to say, “We have decided to close our clinical labs and Theranos Wellness Centers, which will impact approximately 340 employees in Arizona, California, and Pennsylvania. We are profoundly grateful to these team members, many of whom have devoted years to Theranos and our mission, for their commitment to our company and our guests.”
As you may recall, Therano was under major scrutiny last year, a controversy that brought multiple government agencies to voice their concern and even the Centers for Medicare & Medicaid Services to ban the Theranos founder from the whole of the diagnostics industry.
With that, then, Holmes goes on to explain (via the open letter), “We will return our undivided attention to our miniLab platform. Our ultimate goal is to commercialize miniaturized, automated laboratories capable of small-volume sample testing, with an emphasis on vulnerable patient populations, including oncology, pediatrics, and intensive care.”
She also divulges that the company has a new executive team with a plan to work towards earning those FDA clearances and to build more commercial partnerships to further pursue scientific journal publication. Theranos will no longer sell individual diagnostic testing machines—as it was trying to do last year—and will instead, Holmes explains, use its “top-secret” technology to grow and become a leading competitor of LabCorp and Quest Diagnostics.
Obviously, this a shocking development as it basically indicates a complete 180 of the company’s mission statement from just a year ago. Of course, with such controversy still in tow, there is a bit of method to this madness: an attempt to remain a viable company in a related field. However, she still believes her machines are good enough to move into a high-margin model, so time will tell just how well this redirect works for Theranos.