US-based cloud storage company dropbox Laying off about 500 employees. This number is about 16 percent of the company’s entire workforce. In a memo to employees, the Dropbox CEO drew houston Held responsible job cuts For a rocky economy. However, he also said that the cut will help the company build its AI division. Affected employees will be able to receive at least 16 weeks of pay, up to six months of health care, and the ability to keep company equipment for personal use. They will also get career coaching and job placement support. Here’s the memo sent by CEO Drew To employees.
Hi everyone,
I am writing to share that I have made the difficult decision to reduce my global workforce by approximately 16%, or 500 Dropboxers.
First and foremost, I want to recognize the impact this decision has had on the Dropboxers affected and their families, and I take full ownership of this decision and the path that led us here.
If you’re affected, you’ll get a 1:1 with a leader from your team and a member of the People team within the next 30 minutes about your departure, package, and any questions you may have. Today and tomorrow you will also have some time to pack up and say goodbye to co-workers.
why are we making this decision
I’ve said in the past that our business is stable and profitable. So why would we take such a step? What’s changed?
First, while our business is profitable, our growth has been slow. Part of this is due to the natural maturity 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 give positive returns are no longer sustainable.
Second, and more consequentially, the AI era of computing has finally arrived. We have believed for many years that AI will give us new superpowers and completely replace knowledge work. And we’ve been building towards this future for a long time, as this year’s product pipeline will demonstrate.
The opportunity lies before us more than ever, but we need to act with urgency to seize it. Over the past few months, AI has captured the world’s collective imagination, expanding the potential market for our next generation of AI-powered products faster than any of us could have imagined. However, this momentum has also alerted our competitors to many of the same opportunities.
In a perfect world, we would simply move people from one team to another. And we have done that wherever possible. However, our next phase of growth requires a different mix of skill sets, specifically in AI and early stage product development. We have been bringing in fantastic talent in these areas over the last few years and we will need even more.
And we need to accept some more harsh truths. In some areas, investments that showed promise before the recession have more limited potential today. In others, we are not performing consistently or are not managing performance as tightly as we need to. That’s why we’ve made further significant cuts in these areas to free up investment in our future growth.
I am truly sorry that as a result of these decisions, we have had to part ways with Dropboxers and valuable teammates who have made many contributions to the company.
caring for affected employees
To all of you affected by today’s news, we are committed to doing everything we can to care for you during this transition.
Quits will be eligible to receive the following benefits and support:
Severance and equity: Affected employees will be eligible for sixteen weeks’ pay, plus one additional week’s pay for each completed year of tenure at Dropbox. All affected employees will receive their Q2 equity vest.
Healthcare: All employees will be eligible for up to six months of COBRA in the US, and similar equivalents where applicable internationally, as well as advanced health care.
Equipment: Affected employees will be eligible to keep company equipment (phones, tablets, laptops and accessories) for personal use.
Job Placement: Job placement services and career coaching will be available free of cost.
organizational change
Today’s changes were the result of us as a leadership team taking a close look at our strategic priorities and organizational structure and aligning the principles of sustainable financial growth, efficiency and flexibility to invest in our future. We’re also streamlining how the company is organized.
For example, we are consolidating our core and document workflows businesses with a renewed focus on integrating our customers’ key workflows within our core FSS product. We are also realigning and refocusing our business teams to reflect proportionate adjustments to product development teams and improving our strategy.
Team leaders will follow up shortly with more details about any impact on your organization.
building for the future
The changes we are announcing today may be painful, but they are necessary for our future. Change is constant in our business, and the technology changes over the past few decades are instructive. As the world moved from physical film to digital photography, or land lines to wireless communications, or DVD rentals to streaming, opportunity and disruption went hand in hand. Companies that adapted to the new reality and took decisive action fared well. Companies that hung on to the past or tried to achieve it didn’t.
These changes are never easy, but I am determined to ensure that Dropbox is at the forefront of the AI era, just as we were at the forefront of change in mobile and cloud. We’ll need all hands on deck as machine intelligence gives us the tools to re-imagine our existing businesses and invent new ones. And I’m committed to doing everything in my power to best position myself for the future and unlock my full potential.
in closing
We’ll be focused today on supporting the affected employees and saying goodbye to fellow Dropboxers. To those of you leaving: Thank you for everything you’ve done for Dropbox in your time here.
Beginning tomorrow through early next week, I will be hosting regional town halls to answer your questions and discuss our future plans in more detail. We thank you for your kindness and compassion through this difficult process.
Drew
Hi everyone,
I am writing to share that I have made the difficult decision to reduce my global workforce by approximately 16%, or 500 Dropboxers.
First and foremost, I want to recognize the impact this decision has had on the Dropboxers affected and their families, and I take full ownership of this decision and the path that led us here.
If you’re affected, you’ll get a 1:1 with a leader from your team and a member of the People team within the next 30 minutes about your departure, package, and any questions you may have. Today and tomorrow you will also have some time to pack up and say goodbye to co-workers.
why are we making this decision
I’ve said in the past that our business is stable and profitable. So why would we take such a step? What’s changed?
First, while our business is profitable, our growth has been slow. Part of this is due to the natural maturity 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 give positive returns are no longer sustainable.
Second, and more consequentially, the AI era of computing has finally arrived. We have believed for many years that AI will give us new superpowers and completely replace knowledge work. And we’ve been building towards this future for a long time, as this year’s product pipeline will demonstrate.
The opportunity lies before us more than ever, but we need to act with urgency to seize it. Over the past few months, AI has captured the world’s collective imagination, expanding the potential market for our next generation of AI-powered products faster than any of us could have imagined. However, this momentum has also alerted our competitors to many of the same opportunities.
In a perfect world, we would simply move people from one team to another. And we have done that wherever possible. However, our next phase of growth requires a different mix of skill sets, specifically in AI and early stage product development. We have been bringing in fantastic talent in these areas over the last few years and we will need even more.
And we need to accept some more harsh truths. In some areas, investments that showed promise before the recession have more limited potential today. In others, we are not performing consistently or are not managing performance as tightly as we need to. That’s why we’ve made further significant cuts in these areas to free up investment in our future growth.
I am truly sorry that as a result of these decisions, we have had to part ways with Dropboxers and valuable teammates who have made many contributions to the company.
caring for affected employees
To all of you affected by today’s news, we are committed to doing everything we can to care for you during this transition.
Quits will be eligible to receive the following benefits and support:
Severance and equity: Affected employees will be eligible for sixteen weeks’ pay, plus one additional week’s pay for each completed year of tenure at Dropbox. All affected employees will receive their Q2 equity vest.
Healthcare: All employees will be eligible for up to six months of COBRA in the US, and similar equivalents where applicable internationally, as well as advanced health care.
Equipment: Affected employees will be eligible to keep company equipment (phones, tablets, laptops and accessories) for personal use.
Job Placement: Job placement services and career coaching will be available free of cost.
organizational change
Today’s changes were the result of us as a leadership team taking a close look at our strategic priorities and organizational structure and aligning the principles of sustainable financial growth, efficiency and flexibility to invest in our future. We’re also streamlining how the company is organized.
For example, we are consolidating our core and document workflows businesses with a renewed focus on integrating our customers’ key workflows within our core FSS product. We are also realigning and refocusing our business teams to reflect proportionate adjustments to product development teams and improving our strategy.
Team leaders will follow up shortly with more details about any impact on your organization.
building for the future
The changes we are announcing today may be painful, but they are necessary for our future. Change is constant in our business, and the technology changes over the past few decades are instructive. As the world moved from physical film to digital photography, or land lines to wireless communications, or DVD rentals to streaming, opportunity and disruption went hand in hand. Companies that adapted to the new reality and took decisive action fared well. Companies that hung on to the past or tried to achieve it didn’t.
These changes are never easy, but I am determined to ensure that Dropbox is at the forefront of the AI era, just as we were at the forefront of change in mobile and cloud. We’ll need all hands on deck as machine intelligence gives us the tools to re-imagine our existing businesses and invent new ones. And I’m committed to doing everything in my power to best position myself for the future and unlock my full potential.
in closing
We’ll be focused today on supporting the affected employees and saying goodbye to fellow Dropboxers. To those of you leaving: Thank you for everything you’ve done for Dropbox in your time here.
Beginning tomorrow through early next week, I will be hosting regional town halls to answer your questions and discuss our future plans in more detail. We thank you for your kindness and compassion through this difficult process.
Drew