Dropbox is shedding 20 % of its workforce

For the second time in lower than two years, Dropbox is shedding a considerable portion of its workforce. In a blog post penned by CEO Drew Houston, the corporate mentioned it could reduce its international headcount by 20 % or 528 workers.

Dropbox will present impacted employees with as much as 16 weeks of pay, with tenured workers eligible for one extra week of pay for every full 12 months they labored on the firm. All impacted workers may even obtain their 12 months finish fairness vest, and the corporate will present devoted help to immigrant employees with one-on-one session and further transition time.

Per a filing with the SEC, Dropbox anticipates this newest spherical of layoffs will price it as much as $68 million in money expenditures. On the identical time, the corporate expects it can acknowledge between $47 million and $52 million in incremental bills associated to all of the severance and profit payouts it now must make earlier than the tip of 12 months and into the primary half of 2025.

“As CEO, I take full duty for this determination and the circumstances that led to it, and I’m actually sorry to these impacted by this transformation,” Houston wrote. “We proceed to see softening demand and macro headwinds in our core enterprise. However exterior components are solely a part of the story. We’ve heard from a lot of you that our organizational construction has develop into overly complicated, with extra layers of administration slowing us down.”

Partway by final 12 months, Dropbox laid off 500 employees, or about 16 % of its workforce on the time. Evaluating the memo Houston shared then with the one he posted right this moment, there’s a standard theme: slowing development.

“First, whereas our enterprise is worthwhile, our development has been slowing. A part of that is because of the pure maturation of our current companies, however extra just lately, headwinds from the financial downturn have put strain on our clients and, in flip, on our enterprise,” Houston wrote in 2023. “Because of this, some investments that used to ship constructive returns are not sustainable.”

Sadly for Dropbox, issues haven’t improved on that entrance. As TechCrunch notes, the corporate solely added 63,000 customers throughout its most up-to-date fiscal quarter (PDF link). 12 months-over-year income development additionally stalled at 1.8 %, the bottom within the firm’s historical past.