Theranos may have laid off most of its staff
Embattled blood-testing firm Theranos Inc. reportedly has laid off at least 100 employees, a move that reduces its head count to two dozen or fewer.
Citing unnamed sources, the Wall Street Journal reported that the layoffs at the Newark, Calif., company were a desperate attempt to preserve cash and avert bankruptcy for a few more months.
Theranos did not respond to The Times’ request for comment.
News of the layoffs comes about a month after Theranos and its founder and chief executive, Elizabeth Holmes, agreed to settle charges levied by the U.S. Securities and Exchange Commission that the company had conducted a “massive fraud” in which its proprietary blood-testing technology never worked as advertised.
As part of the settlement, Holmes agreed to give up majority voting control over Theranos and to reduce her equity in it. She was also required to pay a $500,000 penalty and return the remaining 18.9 million shares she obtained during the alleged fraud.
Theranos and Holmes did not admit or deny the allegations in the SEC complaint. The company’s former president, Ramesh “Sunny” Balwani, was also charged by the SEC, which said his case will be litigated in federal court in the Northern District of California.
As recently as four years ago, Theranos was valued at $9 billion and hailed as a Silicon Valley darling after claiming that it had developed a revolutionary technology that could perform a multitude of tests with just the amount of blood obtained from pricking a patient’s finger.
But in 2015, the Journal started to publish a series of stories showing how the much-hyped technology was flawed. By May 2016, Theranos had retracted the results of tens of thousands of blood tests that doctors had used to care for patients over the previous two years.
Walgreens terminated its relationship with Theranos, and federal regulators banned Holmes from owning or running a medical lab for two years.
By October 2016, Theranos said it was shutting down its labs and patient testing centers.