Dropbox is reducing its workforce by 20 percent in the latest round of layoffs

“We're making major cuts in areas where we're over-investing or under-performing, and designing a flatter, more efficient team structure overall,” writes Dropbox CEO Drew Houston in a blog post titled “ An update from Drew. At the same time, Houston mentions that the market is moving to where the company has made its “biggest bets,” including Dropbox's Dash AI search product.

For this year's second quarter results, Dropbox reported a quarter-over-quarter increase of 63,000 paid users in August, which is small compared to its overall user base of over 18 million. As reported by TechCrunchIn the second quarter, Dropbox posted the slowest growth in the company's history, and Dropbox shares lost more than 20 percent of their year-to-date value in August.

Houston said Dropbox will say more about its 2025 strategy to expand its core business and accelerate new products in the coming days. Affected employees will receive sixteen weeks of severance pay, equity, bonus plan lump sums, approved leave payout, and immigration counseling for those on work visas. According to Dropbox, most payouts will occur in the fourth quarter of fiscal 2024.