Dropbox Layoffs Hit 11 Percent of Its Workforce; COO Steps Down

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. 

4 Responses to “Dropbox Layoffs Hit 11 Percent of Its Workforce; COO Steps Down”

  1. Dropbox is overpriced compared to its competitors. That is the real issue. The other question is how many offshore developers were laid off? If they are only laying off Americans then we as Americans probably shouldn’t be supporting this company. As usual in companies these days, 1 developer has to do the job of 5 people and do it in the time it used to take for strictly a developer and do it perfectly. Good thing they get the big bucks, too bad they have no time to spend the big bucks.

  2. Those “well-compensated engineers” created a terrible, non-intuitive interface, then “improved” it to even more abysmal. There is NO reason to use Dropbox when you have Google Drive / Apple iCloud / MS OneDrive. It’s sad when Microsoft can offer a better product/service than Dropbox.

  3. Obviously, if you are using a single company’s platform, there is a lot to be said for sticking with that company’s tools, e.g., iCloud for Apple users, etc. However, when it comes to simple, cross-platform file syncing, I think Dropbox offers the best experience, at least if you use its OS integration features, as opposed to its client apps. This is particularly true in business environments where you may be collaborating with people in different companies who use a range of technology stacks. I’m in the tech consulting business, and we run into noticeably fewer support issues with clients and others when Dropbox is the sharing platform, rather than Google, OneDrive, or iCloud. (To be fair, OneDrive has been improving quite a bit.) For personal use, I really like how Dropbox integrates with iPhone’s photo app.

    However, it is true that Dropbox’s client app is a performance-hungry mess of features that few people in the real world seem to want to use. That’s probably driven more by corporate growth requirements than by engineering decisions, though. There probably isn’t a lot of business growth potential in sticking to what it does best, i.e. file syncing and cloud storage. To satisfy shareholders, it needs to find new things that customers are willing to pay for without upsetting its current users, and that can be a very difficult challenge.