Dropbox lays off another 500+ employees as demand softens

What conscionable happened? In a depressingly acquainted move of events, Dropbox is laying disconnected 20% of its labor – 528 group – owed to slowing request and economical factors. The announcement comes conscionable complete a twelvemonth aft it laid disconnected 500 workers, a move it blamed connected its caller attraction connected AI and nan shaky economy.

Drew Houston, Dropbox's CEO, wrote successful a memo to unit that nan institution is successful a transitional period, adding that its main record syncing and sharing business "has matured, and we've been moving to build our adjacent shape of maturation pinch products for illustration Dash," its AI-powered productivity instrumentality that has a cosmopolitan hunt arsenic a main feature.

Houston says navigating nan company's modulation while maintaining its existent building and finance levels is nary longer sustainable. The CEO goes connected to constituent nan digit astatine softening request and macro headwinds successful Dropbox's halfway business, while besides highlighting an overly analyzable organizational building that has excess layers of management.

"And while I'm proud of nan advancement we've made successful nan past mates years, successful immoderate parts of nan business, we're still not delivering astatine nan level our customers merit aliases performing successful statement pinch manufacture peers," Houston wrote. "So we're making much important cuts successful areas wherever we're over-invested aliases underperforming while designing a flatter, much businesslike squad building overall."

In April 2023, Dropbox announced it was laying disconnected astir 500 employees, nan balanced of 16% of its workforce.

Courtesy of layoffs.fyi

Houston besides mentions that nan marketplace is moving toward wherever Dropbox has made its biggest bets – i.e., AI products specified arsenic Dash. He says this underscores nan request for moreover much urgency, moreover much fierce investment, and decisive action.

In an SEC filing, Dropbox estimates that nan layoffs will incur full rate expenditures of $63 cardinal to $68 million, mostly from severance payments, worker benefits, and related costs.

All impacted labor will beryllium eligible for sixteen weeks of pay, pinch 1 further week of salary for each completed twelvemonth of tenure astatine nan company. They will besides person their Q4 equity vesting and beryllium eligible for a pro-rated costs balanced to their 2024 prize target.

Dropbox reported quarterly gross of $634.5 cardinal successful Q2 2024. The 1.9% year-over-year summation represented nan lowest quarterly maturation successful nan company's history, while its shares mislaid much than 20% of their worth twelvemonth to day successful August. The number of paid users accrued by 63,000 successful nan quarter, a fraction of its much than 18 million-strong userbase.

According to layoffs.fyi, 484 tech companies person laid disconnected a full of 142,532 group (Dropbox's caller announcement included) truthful acold this year.