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Chronicles

The story behind the story

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After layoffs at 23andMe, Ancestry says it is laying off 6%, citing slowdown across entire DNA testing category, now that most of early adopters have enrolled

- Ancestry, following 23andMe, made the decision to lay off some employees.  It confirmed to CNBC that the cuts affected 6% of its workforce.

CNBC Christina Farr

Context & Ripple Effects

The consumer DNA testing market is hitting its saturation wall in sequence: 23andMe cut 14% of its staff earlier in the year before raising an $82.5M Series F led by Sequoia and NewView, and now Ancestry follows with a 6% cut, explicitly citing a slowdown across the entire category now that most early adopters have already enrolled. The one-time-kit business model — sell a spit test once, never sell it again — is running out of first-time customers at both category leaders simultaneously.

The longer arc in the coverage shows where this leads: 23andMe had already shut down its developer API to keep raw genetic data in-house, then watched its post-IPO stock crash 98% from a $6B valuation before filing for bankruptcy in 2025 with its DNA database put up for auction. Ancestry's layoffs are the same saturation dynamic arriving at the other major player.

First-order effects

  • Ancestry cuts 6% of its workforce immediately after 23andMe's 14% reduction, meaning both of the category's two dominant consumer testing companies have now shrunk headcount within months of each other.

Second-order effects

  • With kit sales plateauing, both companies are pushed toward monetizing what they already own — the genetic databases — which is the path that led 23andMe to close its API and later auction its database in bankruptcy.

Third-order effects

  • If the one-time-purchase model is structurally exhausted, consumer genomics consolidates around whoever can convert enrolled databases into recurring revenue or sell them outright — a shift the coverage shows culminating in 23andMe's bankruptcy and the auction of its DNA data.

The trend: Consumer DNA testing is transitioning from a land-grab kit business into a database-monetization business, with layoffs marking the end of the enrollment era at each major player in turn.

Discussion

  • @chrissyfarr Christina Farr on x
    It's interesting to me that privacy fears seem to have impacted the core businesses of companies like Ancestry and 23andMe far more than they did to Facebook, despite the fact that there have been far more scandals involving the latter. https://www.cnbc.com/...
  • @joshelman Josh Elman on x
    Big question is will DNA testing cross the chasm? “a slowdown in demand across the entire DNA category now that most early adopters have entered the category.” https://www.cnbc.com/...
  • @shiraovide Shira Ovide on x
    About the cutbacks at Ancestry & 23andMe: A) Are people wary of DNA kits because they think it's creepy? B) Is there a natural limit on the number of people who will do this? C) Is the business model limited, because a DNA test is a 1-time thing https://www.cnbc.com/...
  • @amyjohnsoncrow @amyjohnsoncrow on x
    CNBC reports, “The cuts hit employees across the board, rather than focusing on a specific department, and included workers at all levels. The layoffs affected both its Utah and California offices” https://www.cnbc.com/... #genealogy
  • @emilylmullin Emily Mullin on x
    Most Facebook users continue to get value from the platform, i.e. they use it to interact with people every day. DNA kits are one and done. Most customers aren't going back to revisit their health + ancestry reports. https://twitter.com/...
  • @jakejakeny Jake Novak on x
    This was bound to happen once all the Dem presidential candidates found out that DNA tests really do disprove lies about your ancestry https://www.cnbc.com/...
  • @joemckendrick Joe McKendrick on x
    Due to market saturation or consumer privacy concerns? https://www.cnbc.com/...
  • @hidrees Huda Idrees on x
    Decline in consumer DNA markets is because the novelty has worn off. So now we know where everyone's from. Cool. We failed to take it a step forward to say- and this is how your unique genome sequence impacts your everyday care. https://twitter.com/...