CEO of Theranos Elizabeth Holmes announced her company is shifting away from blood testing to product development for other testing labs, including a blood-testing unit. The move will mean the company will lay off 40 percent of its workforce. Photo by John Angelillo/UPI | License Photo
PALO ALTO, Calif., Oct. 6 (UPI) -- Theranos Inc. announced Wednesday it is ceasing its blood-testing business and shifting to making products for other labs, a move that will cut 40 percent of the company's workforce.
Founder Elizabeth Holmes made the decision -- a dramatic move away from the low-priced blood tests the company is known for -- after those blood tests were found to be faulty.
The company has since faced heavy regulatory sanctions and might have had no where else to go.
The switch is expected to move Theranos more quickly toward new product development, like a printer-sized blood testing device called miniLab.
On Wednesday, Holmes told stakeholders in a statement, "After many months spent assessing our strengths and addressing our weaknesses, we have moved to structure our company around the model best aligned with our core values and mission.
"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.
"We have a new executive team leading our work toward obtaining FDA clearances, building commercial partnerships, and pursuing publications in scientific journals," Homes said.
The company is also being investigated by federal authorities on the possibility it misled investors. The company has denied wrongdoing.