Cloud storage giant Dropbox announced on Thursday that it is laying off 16 per cent of its workforce, or about 500 employees, due to slowing growth.
Dropbox CEO Drew Houston took full ownership of this decision and said while the business is profitable the company’s growth has been slowing.
"If you've been impacted, you'll be sent a calendar invitation for a one-on-one with a leader on your team and a member of the People team to go through details of your departure, package, and to ask any questions you may have," he informed.
Talking about the slow growth he further went on to say, "Part of this is due to the natural maturation of our existing businesses, but more recently, headwinds from the economic downturn have put pressure on our customers and, in turn, on our business."
As a result, some investments that used to deliver positive returns are no longer sustainable, the company informed.
What benefits is the company offering to the employees?
The company said that the impacted employees will be eligible for 16 weeks of pay, with one additional week of pay for each completed year of tenure at Dropbox. The company also said that it will receive their Q2 equity vest and the employees will be eligible for nearly six months of COBRA in the US or the applicable international health support.
Additionally, the impacted employees will be eligible to keep company devices (phones, tablets, laptops, and peripherals) for personal use.
"These transitions are never easy, but I'm determined to ensure that Dropbox is at the forefront of the AI era, just as we were at the forefront of the shift to mobile and the cloud. We'll need all hands on deck as machine intelligence gives us the tools to reimagine our existing businesses and invent new ones," said Houston.
In January 2021 amid the Covid-19 pandemic, Dropbox had laid off 315 employees.
