Dropbox has announced a 20% reduction in its workforce, affecting 528 employees, citing slowed growth in its core cloud storage sector. This follows a previous layoff of 500 employees earlier this year as Dropbox shifts focus toward its expanding AI division.
In a blog post titled “An Update from Drew,” CEO Drew Houston explained that the cuts are aimed at reducing over-investment in underperforming areas and streamlining the team for greater efficiency. Houston noted that the company is now aligning its resources with emerging market trends, particularly its Dash AI search product, which reflects Dropbox’s long-term investment in AI.
Impacted employees will receive a package that includes 16 weeks of severance, equity payouts, lump-sum bonuses, paid leave, and visa support for international workers. Dropbox expects the majority of these severance payments to be disbursed in the fourth quarter of 2024.