For the second time in lower than two years, Dropbox is shedding a considerable portion of its workforce. In a weblog put up penned by CEO Drew Houston, the corporate mentioned it will reduce its world headcount by 20 p.c or 528 workers.
Dropbox will present impacted staff with as much as 16 weeks of pay, with tenured workers eligible for one further week of pay for every full 12 months they labored on the firm. All impacted workers can even obtain their 12 months finish fairness vest, and the corporate will present devoted assist to immigrant staff with one-on-one session and additional transition time.
Per a submitting with the SEC, Dropbox anticipates this newest spherical of layoffs will value it as much as $68 million in money expenditures. On the similar time, the corporate expects it’s going to 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 accountability for this resolution and the circumstances that led to it, and I’m really sorry to these impacted by this modification,” 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 lots of you that our organizational construction has turn into overly advanced, with extra layers of administration slowing us down.”
Partway by final 12 months, Dropbox laid off 500 workers, or about 16 p.c of its workforce on the time. Evaluating the memo Houston shared then with the one he posted at this time, 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 present companies, however extra lately, headwinds from the financial downturn have put strain on our clients and, in flip, on our enterprise,” Houston wrote in 2023. “In consequence, 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 hyperlink). 12 months-over-year income development additionally stalled at 1.8 p.c, the bottom within the firm’s historical past.
