23andMe, the direct-to-consumer genetic testing pioneer, submitted a voluntary Chapter 11 bankruptcy filing in March 2025, citing falling demand for its DNA kits, mounting regulatory and privacy costs. Co-founder and CEO Anne Wojcicki resigned effective immediately, with CFO Joe Selsavage named interim CEO, according to company announcements.
Founded in 2006 and going public via SPAC in 2021 with a peak valuation of around $6 billion, the company struggled to maintain profitability. Its business model, reliant on single-purchase consumer kits, failed to generate recurring revenue. The situation worsened after a major data breach in 2023 that affected nearly seven million users and triggered a $30 million settlement. A mass layoff cutting approximately 40% of the workforce followed in November, and by late 2024, all independent directors resigned amid strategic disputes.
In her resignation statement, Wojcicki explained she was stepping down to position herself as an independent bidder in the court-supervised sale of company assets. She added she remains “supportive of the company and [is] intent on being a bidder.” Meanwhile, an auction process is under way to offload significant parts of the business over 45 days, with the aim of preserving operations and safeguarding customer data during the restructuring.
Customers and regulators are paying close attention to privacy issues as the bankruptcy process unfolds. California Attorney General Rob Bonta issued an advisory reminding Californians of their right to delete their genetic data, citing uncertainties around data ownership in bankruptcy proceedings. 23andMe has stated it will continue protecting personal data and complying with relevant state and federal privacy laws throughout the restructuring.
This development highlights key lessons for executives. Companies relying heavily on one-off consumer purchases must evolve their business models to generate sustainable, long-term revenue. Without a subscription or recurring income stream, even companies with strong brand recognition and early market leadership can falter as demand shifts or operational risks mount.
The executive shake-up amid financial distress also underscores the importance of strong succession and governance frameworks. Clear leadership transition plans and board continuity are essential for preserving stakeholder confidence and guiding organizations through crisis.
Moreover, 23andMe’s situation brings renewed urgency to the issue of data stewardship. Organizations handling sensitive personal data must go beyond regulatory compliance and treat privacy as a core operational and reputational priority. This includes robust systems for managing consent, enabling data deletion, and ensuring transparent communication with users about how their information is stored and used.
As 23andMe works through its court-supervised asset sale and seeks potential buyers, business leaders across industries should reflect on the structural and strategic safeguards needed to navigate similar downturns. Resilient business models, adaptable leadership structures, and proactive data governance policies are no longer optional—they are foundational to long-term survival in a digitally-driven, regulation-heavy marketplace.
