Dropbox Cutting Over 500 Jobs To Create ‘More Efficient Team’

Cloud storage company Dropbox is cutting 528 jobs, about 20% of its staff. This is the second workforce reduction since the company let go of 500 employees in spring 2023.

The reduction will help Dropbox restructure and create a “flatter, more efficient team.” The transition will eliminate underperforming departments as well as enable the expansion of new products.

“As CEO, I take full responsibility for this decision and the circumstances that led to it, and I’m truly sorry to those impacted by this change,” CEO Drew Houston in a Dropbox blog post. “We continue to see softening demand and macro headwinds in our core business.”

Expenses, particularly severance packages and some healthcare benefits, related to the Dropbox layoffs will range between $63 million and $68 million, per a filing with the Securities and Exchange Commission. The company is planning for another $47 million to $52 million in associated costs. The majority of the payouts will occur before the end of this year.

Dropbox Struggles

Dropbox has been seemingly losing market share to online storage rivals Box and Google Drive. In the second quarter that ended June 30, the tech company added 63,000 paying users, which barely nudged its current base of 18.2 million.

Revenue growth in the quarter was the slowest ever experienced by Dropbox. The company brought in $634.5 million, a 1.9% increase year over year.

Moving forward, Dropbox is leaning toward artificial intelligence. The cloud company has been updating its AI-powered Dropbox Dash search tool, adding enterprise-specific features and other data governance tools.

“The steps we’re taking today are necessary to both strengthen our core product and accelerate the growth of our new products,” wrote Houston. “We’ll share more about our 2025 strategy in the days ahead.”

In a similar move, Amazon’s cloud storage unit, AWS, cut hundreds of jobs in April. The move was intended to streamline operations and focus on better-performing departments.