For the second time in less than two years, Dropbox is laying off a substantial portion of its workforce. in a blog post Written by CEO Drew Houston, the company said it would reduce its global workforce by 20 percent or 528 employees.
Dropbox will provide affected workers with up to 16 weeks of pay, and incumbent employees will be eligible for one additional week of pay for each full year they worked at the company. All affected employees will also receive their year-end assets and the company will provide dedicated support to migrant workers with individual consultations and additional transition time.
for a filing with the SECDropbox anticipates this latest round of layoffs will cost it up to $68 million in cash expenses. At the same time, the company expects to recognize between $47 million and $52 million in incremental expenses related to all severance and benefit payments it now needs to make before the end of the year and in the first half of 2025.
“As CEO, I take full responsibility for this decision and the circumstances that led to it, and I am deeply sorry to those affected by this change,” Houston wrote. “We continue to see weakening demand and macroeconomic headwinds in our core business. But external factors are only part of the story. Many of you have told us that our organizational structure has become too complex and that too many levels of management are holding us back.”
In the middle of last year, Dropbox laid off 500 employees, or about 16 percent of its workforce at the time. Comparing the Houston memo shared then With the one you posted today, there is a common theme: slowing growth.
“First, while our business is profitable, our growth has been slowing. Part of this is due to the natural maturation of our existing businesses, but more recently, the headwinds of the economic downturn have put pressure on our customers and, in turn, our business,” Houston wrote in 2023. “As As a result, some investments that used to generate positive returns are no longer sustainable.”
Unfortunately for Dropbox, things haven't improved on that front. As TechCrunch gradesthe company only added 63,000 users during its most recent fiscal quarter (pdf link). Year-on-year revenue growth also stalled at 1.8 percent, the lowest in the company's history.
