23andMe, a DNA testing company, is cutting 40 percent of its staff to avoid bankruptcy and maintain long-term viability. It is the latest setback for a company that was once a darling in the Silicon Valley economy.

TechSpot reports the home DNA testing leader 23andMe will lay off 40% of its workforce this week as part of a restructuring initiative aimed at cutting costs and focusing on core consumer business. The company’s recent setbacks, including accusations of an auto-renewal scheme and a data breach, have led to the decision.

Anne Wojcicki, CEO of 23andMe, stated that “these difficult but necessary measures” are being taken to ensure the long-term success of 23andMe. The layoffs will save the company over $35 million per year, and a one-time expense of $12 million for severance payments and related costs. All of the company’s directors, except for Wojcicki, resigned.

23andMe’s restructuring plan includes the discontinuation of its therapeutics division. This division was focused on cancer treatment and monoclonal therapy research. Wojcicki stated that 23andMe plans to end its in-house research and testing, but will continue to work on these areas via strategic partnerships.

The company is also facing problems after a data breach that occurred last year exposed customer information. The company blamed customers for the breach, rather than take responsibility. They cited “recycled credentials” that hackers had obtained in a separate incident. Later, it was revealed that 23andMe failed to detect the breach of data for more than five months.

The Federal Trade Commission (FTC), which is the federal agency that regulates the marketplace, has recently been investigating 23andMe after complaints from customers who claimed the service automatically renewed memberships and refused refunds. Some users claim that although they physically canceled their subscriptions before the term ended, they were still charged.