Dropbox employees are about to face another mass layoff in less than two years. The cloud storage company’s CEO has confirmed about 20% of employees will be let go.
Mass layoffs at Dropbox will reduce the workforce drastically
Back in 2023, CEO Drew Houston wrote an internal memo that assured the company wasn’t facing any losses but it had to take some remedial action to address the slowdown.
“First, while our business is profitable, our growth has been slowing. Part of this is due to the natural maturation of our existing businesses, but more recently, headwinds from the economic downturn have put pressure on our customers and, in turn, on our business. As a result, some investments that used to deliver positive returns are no longer sustainable.”
According to a recent filing with the US SEC, Dropbox stated the mass layoffs at the company could cost up to $68 million in cash expenditures. Additionally, the company would bear between $47 million and $52 million in incremental expenses.
Will Dropbox grow or shut down in the future?
Houston stated Dropbox is experiencing trouble with growth and added that the company’s internal structure has become complex.
“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. We continue to see softening demand and macro headwinds in our core business. But external factors are only part of the story. We’ve heard from many of you that our organizational structure has become overly complex, with excess layers of management slowing us down.”
Dropbox is struggling with slowing growth. The company has grappled with this issue for multiple years. Last year, Dropbox laid off 16% of its workforce. This meant around 500 employees were let go.
This year, Dropbox will shed around 20% of its workforce, which means 528 employees will lose their jobs in the company. Dropbox hasn’t confirmed which departments will be impacted. However, the company did mention that mass layoffs will take place in multiple countries.
Statistically speaking, Dropbox managed to add just 63,000 users during its most recent fiscal quarter. The company’s growth has also stalled at just 1.8%.
It is important to note that cloud storage as a business isn’t slowing down. However, Google and Apple have been offering a lot of remote storage at competitive prices, thereby making companies like Dropbox redundant. Moreover, Dropbox started limiting the number of synced devices, which didn’t help the company. Additionally, nearly every tech giant, be it Samsung or Meta, is shedding workforce in large numbers.
2024-11-01 15:09:14