This organization has degenerated and changed in nature.
Tips
usage
Two flavors. Literal: insects/snakes shedding skin. Figurative: a person or organization 'sheds' its good qualities and becomes corrupt - almost always negative. The fixed phrase 蜕化变质 ('degenerate and change in nature') is standard official vocabulary for cadres going bad.
mistakes
Don't confuse with 退化 (same pinyin): 退化 means 'regress / atrophy' (a function or organ becomes worse over time), 蜕化 means 'shed and transform' (literal molt or figurative moral decay).