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Dropbox has announced that it will lay off 528 employees, or about 20% of its workforce, marking its second major round of job cuts in less than two years. The decision, disclosed on October 30, was driven by over-investment in some areas and underperformance in others, according to CEO Drew Houston. The layoffs are expected to cost the cloud storage company between $63 million and $68 million.
In a company-wide memo, Drew Houston, CEO of Dropbox, addressed the decision, stating, “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.” He acknowledged the difficulty of the news, adding, “To everyone leaving Dropbox, I’m deeply grateful for everything you’ve done for our company and our customers.”
Employees affected by the layoffs will receive at least 16 weeks of pay, their fourth-quarter 2024 equity vesting, and they will be permitted to keep their office equipment. The announcement comes after a previous round of layoffs in 2023, when Dropbox let go of 16% of its staff, citing challenges posed by the rise of AI technology and a maturing market.
Despite these challenges, Dropbox reported a profit last year and has been heavily investing in its Dash AI search tool, developed in partnership with Nvidia. Yet, the company’s latest earnings showed revenue growth of under two percent, with a reported $634.5 million in revenue. Notably, Dropbox has also allocated $540 million for share repurchases in the first half of the year and stated it has an additional $868 million available for further buybacks as of June 30.
