Latest Dropbox Layoffs Hitting More than 500 Workers

Dropbox layoffs are impacting 528 employees, or 20% of the San Francisco-based company’s workforce.

Dropbox confirmed the layoffs in a U.S. Securities and Exchange Commission (SEC) filing and a letter to employees from CEO Drew Houston.

“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,” he said. “As we've shared over the last year, we're in a transitional period as a company. Our File Synch and Share (FSS) business has matured, and we've been working to build our next phase of growth with products like Dash. However, navigating this transition while maintaining our current structure and investment levels is no longer sustainable.”

Dropbox's Drew Houston

Dropbox employees are already discussing the layoffs on TheLayoff.com.

“I expected a major headcount reduction because we have been steadily losing market share,” one worker wrote. “I’m so sorry for all that are about to be affected in this round of layoffs. For the rest of us, I would stay vigilant. Better to be ready for more layoffs, and have other options lined up. I’m not sure the prospects of Dropbox will change any time soon, nor do I see the intent to.”

Dropbox Layoffs Due to Necessary Changes

Dropbox continues to see softening demand and “macro headwinds” in its core business,  Houston said.

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“But external factors are only part of the story,” he said. “We’ve heard from many of you that our organizational structure has become overly complex, with excess layers of management slowing us down. And while I'm proud of the progress we’ve made in the last couple years, in some parts of the business, we’re still not delivering at the level our customers deserve or performing in line with industry peers. So we're making more significant cuts in areas where we're over-invested or underperforming while designing a flatter, more efficient team structure overall.”

The Dropbox layoffs come at a pivotal moment when the market is accelerating “precisely where we've placed our biggest bets,” Houston said.

“It's been tremendously rewarding over the last few weeks to see customers and prospects light up when using Dash for Business for the first time, much like people did when we first launched Dropbox,” he said. “And this time we're starting from a position of strength. Millions of customers trust us as the home for their most important files, making the leap to organizing all their cloud content a natural evolution. But we're not operating on our own schedule. This market is moving fast and investors are pouring hundreds of millions of dollars into this space. This both validates the opportunity we've been pursuing and underscores the need for even more urgency, even more aggressive investment and decisive action.”

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The layoffs are necessary to both strengthen Dropbox’s core product and accelerate the growth of its new products, Houston said.

Dropbox still expects its third-quarter earnings to meet or beat its guidance for revenue and other metrics.

In April of last year, Dropbox layoffs impacted 16% of its global workforce despite its continuing profitability. At the time, Houston said while the business was still growing, its growth was slowing.