Dropbox Layoffs: Cloud storage provider Dropbox has announced 20 percent workforce layoffs, affecting 528 employees. CEO Drew Houston explained in a letter to staff that the company is going through a significant transition. Dropbox aims to focus on future growth opportunities with innovative products like Dash as it pivots from its established Financial Shared Services (FSS) model.

“While I am proud of the progress we have made in some parts of the business over the last few years, we are still not performing at the level our customers deserve or at the same level as our industry peers. So while we are designing a flatter, more efficient team structure overall, we are making more significant cuts in areas where we are overinvesting or underperforming,” Houston wrote.

In a similar move last April, Dropbox cut its global workforce by 16 percent to cut costs as cloud growth slowed, while also hiring new talent to improve its AI offerings.

Recently, the company announced its results for the second quarter of fiscal 2024 and reported that its total revenue was $634.5 million, an increase of 1.9 percent compared to the same period last year.

The number of paying users increased to 18.22 million from 18.04 million the previous year, and average revenue per paying user increased from $138.94 to $139.93.

As of the end of 2022, Dropbox had 3,118 full-time employees, 2,583 of whom were in the United States. Those affected by the recent layoffs will receive 16 weeks of severance pay, plus an additional week for each year of service, along with health benefits and job placement assistance.

CEO Drew Houston expressed regret over the decision, taking full responsibility for the changes. “As CEO, I take full responsibility for this decision and the circumstances that led to it, and I am truly sorry for those affected by this change,” Houston said.

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