Silicon Valley DNA testing company 23andMe, which has raised nearly $800 million in funding and was last valued at $2.5 billion, cut 14% of its workforce last week.

The cause is a slowdown in sales of its direct-to-consumer DNA kits, which run $100, $200, or $500 depending on how much information you want about your ancestry, genetic composition, health and wellness, carrier status, and vulnerability to certain diseases.

It isn’t just 23andMe. DNA tests went boom in 2018, with the number of consumers who had bought one doubling to 26 million; now sales have gone bust.

MIT Technology Review estimates that the largest DNA test players sold just 4 million to 6 million DNA tests in 2019, an industry growth rate of 20%, the slowest year for the industry ever.

In July on its 2019 Q2 earnings call, the CEO of DNA analysis device-maker Illumina (ILMN) said the “ongoing weakness in the DTC market has resulted in a significant shortfall in our array business” and that “given unanticipated market softness, we are taking an even more cautious view of the opportunity in the near term.”

So Ancestry, 23andMe, FamilyTree DNA and many other small companies are all hurting.

But 23andMe, with its hefty valuation and unicorn status, has perhaps the most pressure on it, with backers that include GlaxoSmithKline and Fidelity. And what’s particularly troubling is that its star CEO Anne Wojcicki (sister of YouTube CEO Susan Wojcicki and ex-wife of Google cofounder Sergey Brin) does not know what the precise problem is or how to fix it.

Anne Wojcicki, CEO and co-founder of 23andMe, speaks at the WSJD Live conference in Laguna Beach, California, U.S., October 26, 2016. REUTERS/Mike Blake More

Wojcicki (it’s pronounced “whoa-jit-ski”) told CNBC she’s “surprised” by the industry slump and that the slowdown “has been slow and painful for us.”

Her candor is refreshing—usually when companies conduct layoffs they throw around vague platitudes about “strategic” moves—but these comments ought to be a wake-up call to the many investors who were so bullish on the DNA testing boom.

The problem could be consumer privacy concerns, which are running high after Equifax, Cambridge Analytica, reports about audio data collected by smart speakers like Amazon Echo, and countless other breaches or scandals that have stoked people’s fears about their personal information. (In 2013, 23andMe had to halt sales of its health testing kits for two years due to an FDA probe; that year, Scientific American called 23andMe “terrifying.”)

23andMe also gets occasional requests from law enforcement for customers’ personal information, and warns in a section on its site, “We have to comply with valid governmental requests and we will notify the affected individual(s), unless the legal request prevents us from doing so.” A separate transparency section of the site says the company has never yet shared customer data with the government despite receiving seven requests.

Wojcicki acknowledges “privacy is top of mind” for consumers right now, but she also theorizes the problem could be fears of a recession, which is a less compelling argument after a record U.S. holiday shopping season amid other reports showing a strong consumer.

It’s also a bad time to be a troubled tech unicorn. Unicorn IPOs including Uber, Lyft, and Peloton did not fare well in 2019. WeWork called its IPO off, and mattress seller Casper, which this month filed its S-1 form to go public, is now seeking an IPO valuation of just $744 million, down from its previous valuation of $1.1 billion—not a unicorn.

At least Peloton and software-as-a-service names like Zoom, Slack, and CrowdStrike have recurring subscription revenue. Another potential issue for 23andMe is that once a person buys the kit and learns about their ancestry, they don’t have to spend more money with the company, though there are optional listing services for additional fees. For many people, it is a single purchase without repeat business.