Embattled blood-testing company Theranos has laid off most of its remaining workforce in an effort to reduce cash flow and avoid a bankruptcy filing for at least a few more months, The Wall Street Journal reported Tuesday.
The layoffs reduce the number of employees working for the Palo Alto, California-based company from about 125 to two dozen or fewer, the newspaper reported, citing people familiar with the matter. The company reportedly had 800 employees as late as 2015.
The layoffs come less than a month after Theranos and its chief executive, Elizabeth Holmes, agreed to settle fraud charges with the US Securities and Exchange Commission. Under terms of the settlement, Holmes will pay a $500,000 penalty, return the 18.9 million remaining shares she obtained and give up majority voting control over the company.
Once valued at $9 billion, Theranos has faced increased scrutiny, along with civil and criminal investigations, since a Wall Street Journal report in October 2015 suggested its blood-testing devices were flawed.
In June of 2016, Walgreens cut ties with Theranos, closing all the startup's blood-draw sites in its stores. Later that year, the federal Centers for Medicare & Medicaid Services banned Holmes from operating a lab for two years and revoked the license for Theranos' lab in California. And in May, the company settled a pair of lawsuits from an investor claiming the company misled it to gain a nearly $100 million investment.
Theranos didn't immediately respond to a request for comment.
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