Theranos, the blood-testing startup that was charged with "massive fraud" by the Securities and Exchange Commission in March, laid off the majority of its remaining staff on Tuesday, people familiar with the matter told the Wall Street Journal.
Theranos reduced its workforce of around 125 employees to about two dozen in an attempt to avoid filing for bankruptcy protection, according to the Journal. This is the company's third round of layoffs since October 2015, when the Journal reported that it was misleading the public and investors about its technology. Founded by Elizabeth Holmes in 2003, Theranos claimed it could detect hundreds of diseases and conditions from a couple drops of blood instead of tubes of blood. In 2015, it was valued at $10 billion and employed about 800 people.
Holmes and former Theranos president Sunny Balwani were also charged with fraud in March, and Holmes agreed to give up majority voting control of the company, reduce her equity, and pay a $500,000 fine. In 2017, Theranos accepted a $100 million loan from New York City-based private equity firm Fortress Investment Group. However, Fortress Investment Group could seize Theranos's assets and liquidate the startup if its cash falls below $3 million, Holmes told investors in an email obtained by the Journal. She added that the layoffs could keep the company's cash reserves above that threshold until the end of July.