Theranos Closes Labs, Lays Off 40 Percent of Employees

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Elizabeth Holmes.Photo: CNBC/NBCU Photo Bank via Getty Images

In an open letter published yesterday on the company’s website, Elizabeth Holmes, the Stanford dropout turned tech billionaire turned Silicon Valley Icarus, announced that Theranos will be shutting down all of its clinical labs and Theranos Wellness Centers. The CEO also announced that the company is laying off 340 employees in Arizona, California, and Pennsylvania, which translates to about 40 percent of the entire Theranos staff.

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.

The Theranos miniLab platform is small blood-testing device that looks like “a computer printer” and can reportedly test for up to 40 diseases in a very small sample of blood. The miniLab technology has yet to be approved by regulators, but, Holmes writes, “we have a new executive team leading our work toward obtaining FDA clearances, building commercial partnerships, and pursuing publications in scientific journals.” (Sources close to the matter are already skeptical that the miniLab works.)

This announcement is just the latest in a series of unfortunate events for Holmes. In July, she was banned by U.S. regulators with the Centers for Medicare and Medicaid Services from operating a medical lab for at least the next two years. (Tough news for someone whose entire business is medical labs, though the company is currently appealing the ban.) Holmes once had a personal net worth estimated at $4.5 billion, but in June Forbes re-estimated that figure, announcing her new net worth at $0. And of course, there was that series of stories from The Wall Street Journal reporting the multibillion-dollar blood-testing technology maybe didn’t actually do what the company said it did.