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Widespread layoffs at embattled blood testing company Theranos

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PALO ALTO, Calif. -- Embattled blood testing company Theranos says it will shut down its clinical labs and wellness centers and lay off more than 40 percent of its full-time employees.

In an open letter released late Wednesday, Theranos CEO Elizabeth Holmes says the shutdowns “will impact approximately 340 employees in Arizona, California, and Pennsylvania.” Theranos has laboratory facilities in Newark, California, and Scottsdale, Arizona.

Holmes says the Palo Alto, California-based company will now focus on its miniLab portable blood-testing product.

“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,” the letter says.

“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.”

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Elizabeth Holmes in September  2015 Andrew Burton, Getty Images

The move comes nearly three months after federal regulators banned Holmes from owning or running a medical laboratory for two years. Theranos is appealing the ban, which stems from an investigation of the California facility. The probe followed reports by The Wall Street Journal in which former employees said the company’s tests were unreliable.

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