23andMe’s Shocking Collapse Raises Major Privacy Concerns

The landscape of consumer genetics took a sharp turn on March 24, 2025, when 23andMe, one of the most recognizable names in the DNA testing industry, announced it had filed for Chapter 11 bankruptcy. This revelation was compounded by the immediate resignation of co-founder and long-standing CEO, Anne Wojcicki. With millions of customers' genetic data entrusted to the company, many are now asking the pressing question: What does this mean for the privacy, safety, and ownership of their DNA information?

The Bankruptcy Filing: An Overview

23andMe disclosed that it has "initiated voluntary Chapter 11 proceedings" with the stated aim of "facilitating a sale process to maximize the value of its business." Chapter 11 bankruptcy typically allows a company to restructure its debts and operations while continuing to operate under court supervision. According to the company, day-to-day business operations—including the handling and management of customer data—are expected to proceed as usual throughout the sale process.

What is striking about this announcement is not merely the financial restructuring but the leadership change at the helm. Wojcicki, who co-founded the company in 2006 and served as its public face and guiding force, resigned from her role effective immediately. Joe Selsavage, the company’s Chief Financial and Accounting Officer, has been appointed as Interim CEO.

The move follows the company's rejection of Wojcicki’s final acquisition proposal on March 10, indicating she had attempted to purchase the company herself, presumably to take it private. In a statement released on X (formerly Twitter), Wojcicki expressed disappointment that her bid had been declined but reaffirmed her commitment to remaining a bidder during the Chapter 11 process. Her departure leaves a leadership void at a critical juncture, adding further uncertainty to 23andMe’s future.

A Tumultuous Period Leading to Chapter 11

23andMe's financial troubles have been brewing over the past year. In December 2024, the company laid off nearly 200 employees, roughly 40% of its workforce. The layoffs were attributed to declining revenues, increased operational costs, and growing market competition in the genetic testing space.

Compounding these financial struggles was the October 2023 security breach that shook customer confidence. Nearly 7 million customers were impacted, raising serious concerns about the safety of sensitive genetic data. Although 23andMe assured users that it had robust privacy protocols in place, the incident inevitably cast a long shadow over the company’s reputation.

The company has long stated that it operates under stringent state and federal consumer and genetic privacy laws, which it claims are well-suited to protect the unique nature of DNA information. However, the combination of data breaches, financial instability, and leadership changes has understandably heightened public anxiety.

What Happens to Your DNA Data Now?

Perhaps the most immediate concern among 23andMe users revolves around the fate of their personal genetic information. DNA data is fundamentally different from other types of personal data. It is immutable and inherently personal, offering insights into not just an individual but their entire familial lineage.

23andMe’s official statements emphasize that customer data remains secure and will continue to be managed in accordance with existing privacy policies. The company has explicitly stated that there will be "no changes" to how customer data is stored, managed, or protected throughout the bankruptcy process.

However, the nature of Chapter 11 proceedings—and the potential sale of the company to new owners—raises several critical questions:

1. Data Ownership and Sale Conditions

In bankruptcy, a company's assets, including data, may be considered part of what is available for sale. Although 23andMe asserts that customer data privacy will remain a priority, future ownership could introduce new terms, business models, or partnerships. The company will be bound by current privacy laws, but any prospective buyer may seek to revisit consent agreements, potentially altering how data is used or shared.

2. Privacy Policy Continuity

Wojcicki previously emphasized her commitment to maintaining the company’s privacy policies, even after privatization. Whether the new leadership or prospective buyers will uphold this commitment remains uncertain. Any significant changes would legally require notifying customers and, in some jurisdictions, obtaining additional consent. Still, the risk of policy shifts is not negligible.

3. Impact of Past Data Breaches

The October 2023 breach has heightened scrutiny around the company’s data security framework. Despite reassurances, public trust has been eroded. Bankruptcy proceedings often stretch IT resources thin, potentially affecting a company’s ability to proactively prevent future breaches.

4. Data Deletion Options

Customers concerned about their data may wonder if they can request its deletion. 23andMe has historically allowed users to delete their genetic data and personal information upon request. However, given the company's current legal and financial situation, it is advisable for concerned customers to act promptly, ensuring they understand and exercise their rights under relevant privacy laws.

Wojcicki’s Vision and Ongoing Involvement

Wojcicki’s resignation does not mean she is stepping away from 23andMe entirely. Her statement clearly indicates she intends to remain a bidder for the company, signaling that she still sees value and potential in its mission. She reiterated her dedication to ensuring that customers retain control and transparency over their genetic information, regardless of who eventually acquires the company.

Her long-standing vision has been to integrate genetics into everyday healthcare, making genetic insights a routine part of medical decision-making. Whether that vision will survive this restructuring process depends largely on who takes over the company and what their strategic priorities will be.

The Bigger Picture: Consumer Genetic Data in a Vulnerable Market

The upheaval at 23andMe underscores larger questions about the consumer genetics industry as a whole. Once heralded as a groundbreaking innovation enabling individuals to learn about ancestry, health risks, and genetic traits, the industry has struggled with profitability, data security, and ethical questions.

Consumer trust is foundational in this sector. Companies handle not just names, emails, and credit card information but irreplaceable genetic blueprints. Any wavering in data security protocols or transparency invites regulatory attention and customer attrition.

Several key takeaways are emerging from the 23andMe saga:

• Financial viability and consumer trust must go hand-in-hand. No amount of scientific innovation can substitute for robust cybersecurity measures and transparent data practices.
• Legal frameworks for genetic data privacy remain fragmented. While U.S. states and federal laws like GINA (Genetic Information Nondiscrimination Act) offer protections, they may not be sufficient to address the complexities of bankruptcy scenarios.
• Data portability and deletion rights are paramount. Customers increasingly want control over where and how their data is stored, shared, and ultimately deleted.

What Should 23andMe Customers Do?

For current 23andMe customers, the coming months will be critical. Here are a few practical steps to consider:

1. Review Privacy Settings: Log into your 23andMe account and ensure you understand your consent options. Opt out of research participation or data sharing if that aligns with your preferences.
2. Request Data Deletion: If you no longer wish for your genetic data to be stored, initiate a deletion request through the company’s platform as soon as possible.
3. Monitor Communications: Keep a close eye on official communications from 23andMe regarding any changes to ownership, privacy policies, or data handling practices.
4. Stay Informed About Legal Rights: Familiarize yourself with relevant consumer privacy laws in your jurisdiction, including your rights concerning genetic information.

While the company insists that protections will remain intact, the shifting corporate landscape necessitates vigilance. The next chapter of 23andMe's story will reveal much about how genetic data is handled in times of corporate uncertainty—and whether customer trust can endure.