On a cloudy Wednesday morning in San Francisco, the moment uBiome's employees had been expecting for months finally arrived.

The beleaguered poop-testing startup began laying off about half its staff, as the company searches for a path forward after an FBI raid and the departures of its founders.

At uBiome's headquarters in San Francisco's SoMa neighborhood, people who'd just been let go began streaming out of a grey warehouse building around 9:30 a.m.

Some carried potted plants. One blasted the Phil Collins rock anthem "You'll be in my heart" out of iPhone speakers.

"It was a s--- show on Monday, it's a s--- show today," one said as she left, to no one in particular.

A troubled stretch for uBiome

In all, uBiome cut 114 of the 229 people it employed, according to a person familiar with the situation — 42 from its US operations and 72 in Latin America.

With all but one exception, people who were let go held mid-level roles across departments including finance, medical affairs, lab operations, communications, and design. uBiome's chief operating officer, Nathaniel Walton, was also let go, as was Susan Zneimer, one of the company's lab directors. Neither person responded to emails or messages sent by Business Insider.

The job cuts forced uBiome to pause running samples for its last remaining test, an $89 kit known as Explorer, according to an internal message seen by Business Insider. The company confirmed the halt in a statement, and said testing would resume when a new lab director is in place.

The layoffs are the latest episode in a turbulent stretch for uBiome, whose tests rely on samples of human poop. The company's troubles first burst into public view in April, when the FBI raided the startup, as part of an investigation into uBiome's billing practices, The Wall Street Journal reported.

Last month, cofounders and co-CEOs Zachary Apte and Jessica Richman resigned, along with John Rakow, uBiome's general counsel and interim CEO. Rakow had taken the lead role after Apte and Richman were placed on administrative leave after the FBI raid.

To run the company, uBiome's board of directors appointed three new executives from the consulting firm Goldin Associates. Five insiders told Business Insider they've been expecting layoffs ever since the FBI raid.

"As we work to implement a go-forward plan for uBiome, we are making changes to the Company's organizational structure that impact certain teams and positions," Curtis Solsvig, the interim uBiome CEO and a director at Goldin, said in a statement provided to Business Insider.

"This was a difficult decision, but we are committed to positioning uBiome for sustainable growth," Solsvig said.

'An operational disaster'

uBiome employees gather outside on Wednesday morning after job cuts were announced at the company. Erin Brodwin / Business Insider

Compounding the pain of the layoffs, uBiome accidentally informed some of its workers they were being let go on Monday in a payroll error, according to four current and former uBiome employees. After the accidental notification, Solsvig called an emergency meeting on Tuesday, the people said.

Pay stubs that seemed to reveal the job cuts were accidentally emailed to some employees, mostly in managerial roles, according to five insiders. The pay stubs, dated for the period from July 1 to 8, would have been accurate had Monday been the employees' last day, the people said.

Within minutes after receiving the stubs, the employees were notified that they had been rescinded. Then, Solsvig called the emergency meeting, the insiders said.

"I'd call it an operational disaster," one insider told Business Insider on Wednesday. "So unprofessional."

Employees were officially informed of their fates in a pair of meetings on Wednesday.

From citizen science project to FBI raid

uBiome's San Francisco headquarters. Erin Brodwin / Business Insider

Trouble at uBiome has been brewing for years, Business Insider has reported.

Read more: uBiome convinced Silicon Valley that testing poop was worth $600 million. Then the FBI came knocking. Here's the inside story.

Founded in 2012 with support from the University of California, San Francisco, and donations from a Kickstarter fundraiser, uBiome sold tests that provide information about the bacteria in your body, called the microbiome. Most of the tests worked by having customers use a swab to take a sample of their poop from used toilet paper.

Problems started shortly after that, Business Insider previously reported.

uBiome stored poop samples in secondhand freezers that lacked temperature monitors, according to former employees, and didn't get a government-certified lab space until almost three years later, government officials said. Staff regularly hid from a founder whom one ex-employee called "abusive," insiders said. And uBiome had an undisclosed partnership with the birth-control startup Nurx, the focus of a recent New York Times investigation.

In 2017, uBiome began attracting attention from Silicon Valley investors. The company raised $105 million from backers such as 8VC, OS Fund, Andreessen Horowitz, and Y Combinator, and was valued at $600 million.

Then in April, the FBI raided uBiome's offices, as part of an investigation into how the company was charging patients and insurers for the medical tests, according to The Wall Street Journal. The US Attorney's Office for the Northern District of California and "several other US and California governmental agencies" were also involved in the FBI search, Rakow told investors in a letter.

The following month, Apte and Richman were placed on leave as uBiome's board of directors launched an independent probe led by the former federal prosecutor George Canellos, a partner at the law firm Milbank. uBiome also suspended sales of its medical tests.

Customers reported problems for more than a year

For at least a year before the FBI raid, uBiome customers complained of billing issues, according to a review of documents submitted to the Federal Trade Commission and obtained by Business Insider. The complaints detail instances of surprise bills as high as $3,000 and of bills sent to insurers for tests that weren't delivered.

The complaints involve two tests — one called SmartGut, which looks at bacteria in the gut, and another called SmartJane, which looks at bacteria in the vagina.

uBiome overstated those tests' medical value and prioritized growth over patient care, Business Insider reported earlier this month, based on interviews with 11 former uBiome employees along with lawyers, outside experts, and government officials.

"Some of my uBiome results remind me of astrology," one former employee said.

With Richman and Apte's departure from uBiome's board, 8VC partner Kimmy Scotti is the sole remaining board member.

This story was initially published on July 10 at 9:09 a.m. San Francisco time and has been updated.