Dropbox plans on laying off 11 percent of its workforce, or 315 people, and COO Olivia Nottebohm will step down at the beginning of February. In an employee memo, Dropbox CEO Drew Houston said that the cloud-based file host must switch strategies in order to execute on its product roadmap.
“Looking ahead at 2021 and beyond, it’s clear that we need to make changes in order to create a healthy and thriving business for the future,” Houston wrote in that memo, which was included in an SEC filing and reposted by ZDNet. “Over the past year, we’ve talked a lot about the importance of running a tight ship and getting the company ready for the next stage of growth. This will require relentless focus on initiatives that align tightly with our strategic priorities, and having the discipline to pull back from those that don’t.”
In a corporate blog posting, Houston added: “The steps we’re taking today are painful, but necessary. Our recent decisions regarding our new leadership structure and remote work policy have set us on the right path, and now we need to make sure our teams and investments also line up.”
Those North American employees laid off will receive three months of base pay, along with their Q1 equity vest; those on the corporate bonus plan will be eligible for a lump-sum transition payment equivalent to 100 percent of their 2020 bonus target. Impacted employees will be eligible for healthcare, and have the option of keeping their work devices for personal use.
Although Dropbox has attracted a sizable audience over the years, it still faces strong competition in the cloud-storage space from pretty much every big player out there, including Google, Apple, and Microsoft. Despite those pressures, it’s long been a lucrative place to work for software engineers, at least based on crowdsourced compensation data from levels.fyi:
The big question now is whether Dropbox’s well-compensated engineers can execute on the new product roadmap in a way that allows the company to expand again. As its rivals boost their cloud-storage options, Dropbox could find itself in a continuing battle for survival.