Cloud storage platform, Dropbox has announced it will lay off 528 employees, or 20% of its global staff, marking the second substantial round of layoffs in less than two years.
The Chief Executive Officer Drew Houston detailed the decision in a recent blog post, attributing the cuts to ongoing challenges in the market and internal complexities within the organization.
Affected employees will receive severance packages that include up to 16 weeks of pay, with additional weeks for long-tenured staff. They will also retain their year-end equity vesting and will have access to dedicated support services, particularly for immigrant workers, including one-on-one consultations and extended transition time.
According to a filing with the Securities and Exchange Commission, the layoffs are expected to cost Dropbox up to $68 million in cash expenditures. The company anticipates recognizing between $47 million and $52 million in additional expenses related to severance and benefits before the end of the year and into the first half of 2025.
Houston expressed regret over the layoffs, stating, “As CEO, I take full responsibility for this decision and the circumstances that led to it. We continue to see softening demand and macro headwinds in our core business.” He noted that feedback indicated the company’s organizational structure had become too complex, leading to inefficiencies.
This announcement follows a previous layoff in mid-2023, when Dropbox cut approximately 16% of its workforce, citing similar concerns about slowing growth. During that time, Houston highlighted the pressures of an economic downturn and the maturation of existing business segments, stating that some previously profitable investments had become unsustainable.
Recent reports indicate that Dropbox’s growth challenges persist, with the company adding only 63,000 users in the last fiscal quarter. Year-over-year revenue growth has also stagnated at 1.8%, the lowest rate in the company’s history.
