Dropbox to lay off 20% of its workforce

Last year in April, Dropbox fired 16% of the workforce for similar reasons due to a decrease in cloud growth and spent money in hiring AI specialists instead

Dropbox is laying off 20% or 528 employees from its workforce as the cloud storage company goes through a “significant transitional period,” CEO Drew Houston said. In a letter addressed to the staff, he added that the company had “over-invested” earlier and was looking to move to a “flatter, more efficient” team structure now. 

The letter noted that the impacted employees will be given severance, equity, transition payments as well as some healthcare benefits and job placement services. 

A filing with the SEC showed that the company has set aside cash expenditure between $63 million and $68 million for the layoffs as severance and benefits with between $47 million and $52 million as incremental expense. These payments will be accounted for by the first half of 2025.

The company reported its second-quarter results with total revenue generated of $634.5 million, an increase of 1.9% from last year. It added just 63, 000 new users in the quarter bringing total number of paying users up from 18.04 million to 18.22 million.

Last year in April, Dropbox fired 16% of the workforce for similar reasons due to a decrease in cloud growth and spent money in hiring AI specialists instead. 

The company now has expanded its AI-powered smart organisation and search tool called Dropbox Dash to include enterprise-focused features and data governance controls. 

Published - November 01, 2024 02:10 pm IST