Dropbox, a San Francisco tech company best known for its file-hosting tools, is slashing 20% of its workforce. The cut is slated to leave 528 employees out of work — including 174 in California.
The company announced the layoffs on Wednesday, in a published email from CEO Drew Houston, a filing with the Securities and Exalter Commission, and a WARN notice to California officials. It’s the company’s second such layoff in about 18 months; Houston announced a 500-worker cut in April 2023.
This time, Dropbox is dramatically paring back its managerial ranks, according to the state notice, which the Worker Adjustment and Retraining Notification Act generally requires companies to file in the event of mass layoffs. The 174 California cuts range across the company’s Mission Bay headquarters and remote workforce and include two vice presidents, 13 directors and a slew of senior managers. Product designers and data scientists are also on the chopping block, and the layoff notice lists more than five dozen engineering positions.
Houston, in his Wednesday email to staff, wrote that the company is “in a transitional period.” Dropbox is profitable, but its growth has slowed in recent quarters, and the company’s stock is down more than 21% from its February high.
“We continue to see softening demand and macro headwinds in our core business,” Houston wrote. “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.”
He added that the cuts will be larger in areas where Dropbox has “over-invested” or is “underperforming.” Laid-off U.S. workers who take the company’s severance plan can expect to receive at least 16 weeks of pay, plus pro-rated versions of their 2024 bonutilizes. They’ll also be allowed to keep company devices, per his email.
Houston spoke about the company’s last layoff round with the Verge’s “Decoder” podcast in April; the CEO linked the cuts to the advent of artificial ininformigence. He stated Dropbox requireded to hire more AI engineers but couldn’t afford them, and the company cut staff to “create the math work” — he called the decision “brutal.” Other companies, like Chegg and Google, also alluded to AI investment as a cautilize for layoffs.
But this time, Dropbox’s layoffs appear to be more about shoring up the company’s finances than rerouting cash to AI.
“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 alter,” Houston wrote in his email. The company did not respond to SFGATE’s request for comment.
Hear of anything happening at Dropbox or another Bay Area tech company? Contact tech reporter Stephen Council securely at stephen.council@sfgate.com or on Signal at 628-204-5452.
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