Elizabeth Holmes (L) and Alan Murray speak at the Fortune Global Forum on Nov. 2, 2015 in San Francisco.
Remember that “bait-and-switch” Theranos CEO Elizabeth Holmes pulled in August, when she previewed a new product rather than offer peer-reviewed data on the company’s once-hyped blood testing technology? It turned out that the product Holmes showed, the miniLab, is what she’s betting the future of Theranos on.
Wednesday, Holmes announced that the embattled company was shutting down its clinical labs and direct-to-consumer blood testing services — the core of what Holmes has been working on since she dropped out of Stanford University in 2004. In a letter posted on the Theranos website, Holmes said the closings would affect 340 workers in California, Arizona and Pennsylvania.
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The Wall Street Journal reported that the cuts amount to more than 40 percent of the Palo Alto, California-based company’s workforce, based on an earlier statement indicating that Theranos employed 790 people as of Aug. 1.
“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,” Holmes said in her open letter.
She also referenced a “new executive team leading our work toward obtaining FDA clearances, building commercial partnerships and pursuing publications in scientific journals.” There kind of has to be, as the Centers for Medicare and Medicaid Services has banned Holmes from owning, operating or directing a clinical lab for two years.
COO and President Sunny Balwani departed the company in May in the face of federal civil and criminal investigations. Balwani has not been charged with any crimes, nor has he been replaced yet, according to the Theranos website.
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So, what does the future hold for Theranos? Really, only Holmes — or perhaps a federal grand jury — knows for sure. But her dream of disrupting the lab business with minimally invasive blood testing seems gone for good, and Theranos seems like it wants to be a device company now.
But, as usual, the empress has no clothes. The link supposedly describing miniLab was broken late Wednesday night.
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The "Theranos" business. Holmes took money to do what she failed to do, and never could do. How in the name of God is she not in jail?
— Richard M. Nixon (@dick_nixon) October 6, 2016
At least Nixon didn’t invest in Theranos. Then he might really be mad.
Images: Kimberly White/Getty Images for Fortune, theranos.com screen grab
