Dropbox is laying off 20 percent of its workforce
For the second time in less than two years, Dropbox is laying off a substantial portion of its workforce. In a blog post penned by CEO Drew Houston, the company said it would cut its global headcount by 20 percent or 528 employees.
Dropbox will provide impacted workers with up to 16 weeks of pay, with tenured employees eligible for one additional week of pay for each complete year they worked at the company. All impacted employees will also receive their year end equity vest, and the company will provide dedicated support to immigrant workers with one-on-one consultation and extra transition time.
Per a filing with the SEC, Dropbox anticipates this latest round of layoffs will cost it up to $68 million in cash expenditures. At the same time, the company expects it will recognize between $47 million and $52 million in incremental expenses related to all the severance and benefit payouts it now needs to make before the end of year and into the first half of 2025.
As CEO, I take full responsibility for this decision and the circumstances that led to it, and I'm truly sorry to those impacted 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've heard from many of you that our organizational structure has become overly complex, with excess layers of management slowing us down."
Partway through last year, Dropbox laid off 500 employees, or about 16 percent of its workforce at the time. Comparing the memo Houston shared then with the one he posted today, there's 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, headwinds from the economic downturn have put pressure on our customers and, in turn, on our business," Houston wrote in 2023. As a result, some investments that used to deliver positive returns are no longer sustainable."
Unfortunately for Dropbox, things haven't improved on that front. As TechCrunch notes, the company only added 63,000 users during its most recent fiscal quarter (PDF link). Year-over-year revenue growth also stalled at 1.8 percent, the lowest in the company's history.
This article originally appeared on Engadget at https://www.engadget.com/big-tech/dropbox-is-laying-off-20-percent-of-its-workforce-151023877.html?src=rss