New year, old problems for Theranos. The once-promising blood-testing startup, a darling of Silicon Valley venture capitalists, isn’t exactly starting 2017 on the best foot. On Friday, the company released an official statement revealing that it would be “re-engineering operations,” a euphemism for massive layoffs.
In attempts to streamline the commercialization of its miniLab testing platform and related technologies, Theranos said that it would be aligning teams to “meet product development, regulatory, and commercial milestones.” But “aligning” appears to be synonymous with downsizing.
“The company has identified a core team of 220 professionals to execute on its business plans, and informed 155 employees that their positions have been eliminated,” Theranos wrote in its announcement, “These are always the most difficult decisions; however, this move allows Theranos to marshal its resources most efficiently and effectively.”
The 155 employees represent a considerable 41 percent of Theranos’ employee base, and this move comes just months after the company let go of 340 employees and closed its clinical labs and consumer outlets. These trials and tribulations have closely followed Theranos since it was revealed that its supposedly groundbreaking blood-testing techniques were neither accurate nor particularly viable. It now faces multiple lawsuits and investigations.
Theranos CEO Elizabeth Holmes also saw her own personal estimated net worth fall from $4.5 billion to $0 last year, and the $9 billion valuation of her company has similarly collapsed.
“The restructuring follows a period of significant change at the company that has included the building out of its executive team with substantial additional regulatory, compliance, and operational expertise,” Theranos concluded in its statement. It is unclear if the rest of 2017 will bear much better news for the company.
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