Dropbox fires 20 percent of its employees
Dropbox CEO Drew Houston is cutting back on the company in the face of declining demand and overly complex management structures.
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Cloud storage specialist Dropbox is laying off 20 percent of its workforce, a total of 528 people. In his announcement, CEO Drew Houston spoke of a "phase of transition" in which the company finds itself. The structure of the company had become too complex and superfluous management levels were slowing it down. In addition, there was also declining demand on the market and "macroeconomic headwinds", explained Houston. Divisions in which too much had been invested or which were underperforming would now have to accept cutbacks in favor of a flatter team structure and better profitability.
According to a statement to the SEC, Dropbox expects that the job cuts will require cash outlays of between 63 million and 68 million US dollars for severance payments, social benefits and the like. The company also estimates additional expenses of 47 million to 52 million US dollars in connection with the redundancies. The majority of the redundancies are to take place in the fourth quarter of the fiscal year.
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Like almost everyone in the tech industry, Dropbox has high hopes for the future in AI. In mid-October, for example, the company presented its AI-based search tool called Dash for Business, which is set to be launched in markets outside the US in 2025. It remains to be seen whether this will be enough to drive forward the recently stagnating business. In any case, the figures for the second quarter of 2024 presented in August showed revenue growth of just 1.8% compared to the previous year. The number of paying users rose by around 180,000 to 18.22 million in the same period. Dropbox had already laid off around 500 employees a year ago, as reported by Techcrunch.
(axk)
