Dropbox is letting go 20% of its workforce as the cloud company undergoes what CEO Drew Houston calls a “transitional period.”
In a letter to staff, Houston said that the reduction in headcount would impact 528 people.
“As CEO, I take full responsibility for this decision and the circumstances that led to it, and I’m truly sorry to those impacted by this change,” he wrote.
Affected employees will receive severance, equity, and transition payment, as well as certain healthcare and benefits and job placement services.
Dropbox has struggled to grow in recent months, losing market share to rivals including Box and Google Drive. In its most recent fiscal quarter, the company added only 63,000 new users — a fraction of its roughly 18 million user base — while revenue growth slid to the low single digits.
In Q2, 1.9% y/y to $634.5 million in the quarter; though this came in marginally ahead of Street expectations of $630.5 million, or 1.3% growth. Not only is this the lowest quarter for growth in Dropbox’s history, the already-slow growth rate got sliced further in half from Q1 (dropping 140bps relative to 3.3% growth in Q1).
