Scandal-plagued Theranos lays off nearly half of employees

by Ali Breland - 01/06/17 3:43 PM ET

Embattled blood-testing startup Theranos laid off more than 40 percent of its employees Friday, eliminating 115 jobs in total.

“These are always the most difficult decisions; however, this move allows Theranos to marshal its resources most efficiently and effectively,” the company said in a press release.

{mosads}Theranos initially came into the public eye as a media darling, especially for CEO Elizabeth Holmes’s story of leaving Stanford to start the company at 19 years old.

But the reputation of the company and CEO came crashing down after a series of Wall Street Journal reports in 2015 that Theranos may have significantly oversold and undelivered on its promises.

In April 2016, federal investigators launched an investigation into Theranos. By July, Holmes had been banned from blood-testing for two years.

The negative press and government reproach has led investors and partners, including Walgreens, to pull out dealings with Theranos and in some cases sue the company.

Friday’s announced layoffs are the second major release of Theranos employees. The startup laid off 340 employees in October. Only 220 employees remain.

Theranos has said that it is reforming its operations, working to gain FDA clearance for one of its projects and publishing articles in scientific journals.

The company has also gutted its management team, hiring experienced healthcare board members and executives that critics say it had lacked.

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