Dropbox to Lay Off 16% of its Workforce

Dropbox announced it was laying off 500 employees, or about 16% of its entire workforce, as announced on the company's website in a blog post on Thursday.

‍

As CEO of Dropbox Drew Houston writes in his blog post, the company has been grappling with slowing growth as a result of economic headwinds, as well as a maturing of its business that is impacting its customers, as well as maturing its business model.

‍

In addition, Houston said that the company is also facing the urgency to focus more on AI-powered products to meet the company's expectations, and in order to accomplish that, workers with a wide range of skills will be needed.

‍

"There would be no problem if we simply switched people from one team to another if it were an ideal world," Houston wrote. "Whenever possible, we have made sure that we have done that. Nevertheless, as we move into the next stage of our growth, we need a different mix of skills in particular in artificial intelligence (AI) and the early stages of product development. Our team has been bringing in great talent in these areas over the last couple of years, and we will be needing even more in the future."

‍

Dropbox will provide free job placement assistance and career coaching to affected employees as part of the severance package, as well as up to 16 weeks of severance pay for each year of employment with Dropbox, according to the blog post.

‍

Houston described the layoffs as part of a broader company consolidation as the company combines its Core and Document Workflows businesses and restructures some internal teams as part of this process. There will be internal town halls hosted by Dropbox tomorrow and next week in order to answer any questions employees might have.

‍

“Transitions like these are never easy, but I am determined to ensure that Dropbox stands at the forefront of the AI era, just as the company was at the forefront of the shift to mobile and the cloud," Houston wrote in an email.