Theranos to shut clinical labs and lay off 340 employees
Beleaguered blood-testing company Theranos announced on Wednesday night an extensive retrenchment, that will see the closure of its clinical labs and ‘Wellness Centers’.
The news comes after the CMS handed down a ban to the company’s CEO Elizabeth Holmes that prevents her from owning or operating a clinical lab for two years. The regulators have also revoked the CLIA certificate for the company’s Newark, CA lab.
340 employees are expected to be laid off in Arizona, California and Pennsylvania, nearly half of the 790-strong Theranos workforce. CEO Elizabeth Holmes announced the cuts in an open letter to stakeholders, which stated that the move came after “many months of assessing our strengths and addressing our weaknesses.”
“[W]e have moved to structure our company around the model best aligned with our core values and mission,” Holmes wrote.
What that mission looks like is increased focus on the miniLab platform, which is intended to condense the process of running multiple blood tests into a single machine. “Our ultimate goal is to commercialize miniaturized, automated laboratories capable of small-volume sample testing,” explained Holmes. That commercialisation comes in the form of selling to hospitals and doctor’s offices, representing a significant pivot away from the company’s past focus on consumer blood testing.
Holmes made a passionate case for miniLab at the annual meeting for AACC earlier this year. Data shown in her presentation suggested that the platform could handle a range of different tests from analysis of blood chemistry to diagnosing Zika infection. But given the issues with the flagship Theranos product Edison, many remain unconvinced that miniLab will live up to expectations.
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