Dropbox is laying off 528 positions, or 20% of its global staff.
The company’s CEO, Drew Houston, disclosed this in a note to staff on Wednesday.
In a message to staff, Houston stated that the workforce cut would affect 528 people. The goal, he continued, was to minimize costs in areas where Dropbox had “over-invested” while creating a “flatter, more efficient” team structure.
Dropbox has announced that it expects its third-quarter 2024 financial results to be in line with or above its previously provided guidance ranges for revenue, constant currency revenue, and non-GAAP operating margin, which were posted on the Company’s investors.dropbox.com website on August 8, 2024.
The move follows a 16% reduction in Dropbox’s employment in April 2023, which affected 500 employees.
Houston explained that the changes were necessary due to slowing growth, economic difficulties, and the need to spend more resources and headcount in the increasingly competitive AI race.
“Navigating this transition while maintaining our current structure and investment levels is no longer sustainable,” Houston said in his note.
According to an SEC filing, Dropbox expects to spend $63 million to $68 million on layoffs, largely for severance and benefits, and realize $47 million to $52 million in incremental expense.
The majority of the payouts will occur in Q4 2024, with the remaining recognized in H1 2025.
Starting on Wednesday, impacted workers will be paid for 16 weeks, plus an extra week for each year of service accrued.
According to Houston, Dropbox is aiming for a “flatter, more efficient” team structure and will be reducing the areas of its operations where it is “over-invested or underperforming.”
We earlier reported that Samsung Electronics is reportedly planning to slash up to 30% of its workers outside of its home market of South Korea, with the cuts due to take effect by the end of the year.
