Blood testing startup Theranos announced Wednesday that it’s shutting down its blood testing facilities and laying off more than 40 percent of its staff, the Wall Street Journal reports. The move comes after reports that Theranos’ patenting blood-testing technology is, in fact, extremely inaccurate, and after the company’s founder Elizabeth Holmes was banned from running a lab for two years.
Theranos’ claims that they could accurately do dozens of lab tests from a tiny amount of blood was first called into question this time last year by the WSJ’s John Carreyrou, with the company effusively pushing back on those reports. But in July, after conducting an investigation of one of their labs in Newark, California, Theranos was sanctioned by the Centers for Medicare & Medicaid Services and Holmes was banned from running a lab, decisions the company is appealing.
The WSJ reports that Theranos is doing all that lab-closing and firing so they can focus on yet another blood-testing device called Minilab, this one also not yet approved by federal regulators. The company is laying off about 34o of its 790 employees.
Holmes founded Theranos in 2003, when she was just 19 years old and had recently dropped out of Stanford, quickly earning a wide amount of press and praise. Since the company’s claims began to unravel, Forbes changed her estimated net worth from $4.5 billion to “nothing.”