'Generous' severance | Dropbox to cut 20% of jobs as it aims for 'more efficient team structure'

Dropbox has announced plans to cut 20% of its workforce—amounting to 528 roles—as the company faces declining growth in its core cloud storage business.

The move marks the second round of significant layoffs for Dropbox in 2024, following an earlier reduction of around 500 employees aimed at focusing more resources on its AI division. Dropbox’s latest cuts are part of a broader restructuring to streamline operations and shift focus towards AI-driven initiatives, notably the company’s Dash AI search product.

CEO Drew Houston, shared the news in a company blog post titled “An Update from Drew,” emphasizing that the decision was driven by a need to make “more significant cuts in areas where [Dropbox is] over-invested or underperforming.”

According to Houston, the layoffs are also part of a push to create a “flatter, more efficient team structure” as the company realigns its priorities. He noted that the broader market is now beginning to move in the direction where Dropbox has placed its “biggest bets,” including the new AI-powered search tool, Dash.