Sema4, an AI-driven genomics and clinical data intelligence company, said it would undergo layoffs and eliminate its somatic tumor testing business.
The company said it was trimming its workforce by 250 employees, which equates to 13% of its workforce. Combined with layoffs earlier in the year, the company has axed nearly one in three employees from its legacy business.
As part of the changes, the Stamford, Connecticut-based company also said its founder, president and chief research & development officer, Eric Schadt is departing the company. Schadt, who is also the dean of precision medicine at the Icahn School of Medicine at Mount Sinai, started the company in 2017.
The company is hiring Matthew Davis to serve as chief technology and product officer. Davis was most recently head of data and AI at genetic testing company, Invitae.
Sema4 joins a growing list of digital health companies, including Calm, Cerebral and Carbon Health, that have cut staff in recent weeks with the aim of achieving profitability faster.
Ending its somatic tumor testing business is expected to save the company approximately $35 million in expenses. The company said it represented less than 1% of total revenue. In federal government filings, the company did not rule out future divestments from that business line and would consider “disposing other assets or businesses in the future.”
Earlier this year, Sema4 acquired GeneDx, a genomic testing and data analytics platform, for $623 million. Its performance is meeting internal expectations and tracking ahead of prior projection, but the company’s losses have mounted throughout the year. After nearly reaching profitability in the first half of 2021, the company posted a $29.5 million loss last quarter.
In addition to the layoffs, the company said it would reduce its physical footprint by closing a clinical laboratory in Branford, Connecticut and move its hereditary cancer testing operations from Stamford to Gaithersburg, Maryland by the end of the third quarter.
“As we look forward, Sema4 will have a dramatically improved. Cost structure and a more targeted commercial effort supported by an optimized product development strategy,” Katherine Stueland, Sema4’s CEO said in a prepared statement.
Sema4 said the layoffs and restructuring would save approximately $50 million in 2022.
The company’s stock price was trading for $1.87 per share at press time. It has fallen 90% in the last year from $11.36 per share in August 2021.
