For the second time in less than two years, Dropbox is laying off a significant portion of its workforce. a blog post Penned by CEO Drew Houston, the company said it would cut its global workforce by 20 percent, or 528 employees.
Dropbox will provide affected employees with up to 16 weeks of pay, while incumbents will be entitled to an additional week of pay for each year they have been with the company. All affected employees will also receive equity at the end of the year, and the company will provide special support to immigrant workers with one-on-one counseling and additional transition time.
per head filing with the SECDropbox estimates that this latest round of cuts will cost it $68 million in cash. Meanwhile, the company expects to recognize $47 million to $52 million in additional costs related to all severance and benefit payments it has to make through the end of the year and through the first half of 2025.
“As CEO, I take full responsibility for this decision and the circumstances that led to it, and I sincerely apologize to those affected by this change,” Houston wrote. “We continue to see softening demand and macro headwinds in our core business. But external factors are only part of the story. We have heard from many of you that our organizational structure has become too complex, too many layers of management are holding us back.”
Dropbox in the middle of last year He fired 500 workersor about 16 percent of the labor force at that time. Comparison of the Houston memo then shared has a common theme with the one he posted today: slowing growth.
“First, although our business is profitable, our growth is slowing down. Part of this is due to the natural maturation of our existing businesses, but recent headwinds from the economic downturn have put pressure on our customers and, in turn, our business,” Houston wrote in 2023. “As a result, some previously profitable investments are no longer sustainable.”
Unfortunately, things haven’t improved for Dropbox on that front. as TechCrunch notesthe company only added 63,000 users in its most recent fiscal quarter (PDF link). Annual revenue growth also stood at 1.8 percent, the lowest in the company’s history.
