Theranos just laid off 340 workers and is closing all its clinical labs Theranos just laid off 340 workers and is closing all its clinical labs

Theranos CEO Elizabeth Holmes Jeff Chiu/AP

Theranos CEO Elizabeth Holmes just announced via an open letter that the embattled blood testing startup will be closing all of its clinical labs and Wellness Centers, in a move she estimates will impact 340 employees.

The move is intended to refocus Theranos away from doing clinical tests on blood samples, and towards developing its miniLab medical data processing product, Holmes writes, which it first debuted at a scientific conference in August.

Just over a year ago, Theranos was touting its first FDA approval for a herpes test that could be run with just a few drops of blood. This July, the Centers for Medicare and Medicaid, which regulates blood-testing labs, barred Holmes from the industry for two years, imposing other sanctions including banning the company from working with the Medicare program.

Theranos is now in the middle of a number of government investigations, including one by a congressional committee. It's seen major deals fall apart, including its partnership with Walgreens drug stores. Walgreens ended the relationship in June and said it would shut 40 of them down.

Following the presentation of the MiniLab, Holmes seemed unable to answer questions from the scientific community about the key science behind Theranos and its technology. 

The labs affected by this news are located in Arizona, California, and Pennsylvania. 

Here's the full text of Holmes' open letter:

"For our stakeholders,

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.

We have decided to close our clinical labs and Theranos Wellness Centers, which will impact approximately 340 employees in Arizona, California, and Pennsylvania.  We are profoundly grateful to these team members, many of whom have devoted years to Theranos and our mission, for their commitment to our company and our guests.

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.

We have a new executive team leading our work toward obtaining FDA clearances, building commercial partnerships, and pursuing publications in scientific journals.

We are fortunate to have supporters and investors who believe deeply in our mission of affordable, less invasive lab testing, and to have the runway to realize our vision.

I look forward to sharing more with you as we progress along the way.

Sincerely,

Elizabeth Holmes"