Dropbox, which has an important place in the cloud storage field, announced that it will make a 20 percent cut in its workforce and lay off 528 employees. This decision, made due to slow growth in the company’s core cloud storage service, leads to a major change in Dropbox’s workforce. Earlier this year, Dropbox laid off approximately 500 employees in order to focus on artificial intelligence (AI) focused work.
In his blog post titled “An Update from Drew”, Dropbox CEO Drew Houston stated that in order to make the company’s current team structure leaner and more efficient, significant cuts were made in areas where there was over-investment or under-performance. Houston also noted that market trends are shifting to artificial intelligence solutions, in which Dropbox is making “huge investments.” This strategy focuses specifically on the company’s search product called Dash AI.
In its financial reports for the second quarter of 2023, Dropbox increased the number of paid users by only 63 thousand quarterly, increasing the total number of users to over 18 million. However, this increase was recorded as the slowest growth period in the company’s history. Dropbox shares lost more than 20 percent of their value on a yearly basis in August, TechCrunch reported.
Dropbox will announce its 2025 strategy in the coming days
Houston stated that they will announce details about the company’s 2025 strategy, which includes the goal of growing its core business and introducing new products to the market faster, in the coming days. On the other hand, the slowdown in the growth of Dropbox’s cloud storage service and current market conditions cause the company to turn to areas that will accelerate its future development.
Dismissed employees will be paid a total of sixteen weeks of severance pay and will be paid for bonuses and approved leaves, as well as stock rights. Additionally, immigration consultancy services will be provided for those with a work visa. Dropbox announced that most of these payments will occur in the fiscal fourth quarter.