As the cloud storage firm enters a "significant transitional period," Dropbox is cutting off 20% of its workforce, or 528 workers, according to CEO Drew Houston. He said that the business had "over-invested" in the past and was now seeking to switch to a "flatter, more efficient" team structure in a letter to the employees.
The affected employees will get transition payments, severance, equity, certain healthcare benefits, and job placement assistance, according to the letter.
According to an SEC filing, the business has allocated between $63 million and $68 million in cash for severance and benefits during the layoffs, with an additional charge of between $47 million and $52 million. The first half of 2025 will account for these payments.
The business recorded $634.5 million in total revenue for the second quarter, a 1.9% rise over the previous year. The total number of paying users increased from 18.04 million to 18.22 million throughout the quarter, with just 63,000 new members joining.
Due to a decline in cloud growth, Dropbox let off 16% of its employees in April of last year for similar reasons and instead invested on hiring AI experts.
The business has now added enterprise-focused capabilities and data governance controls to Dropbox Dash, its AI-powered smart organisation and search tool.
