The same forces that enable high tech salaries, also make layoffs more likely.<p>- The market for talent is competitive. So companies bid up to the absolute max they can
- The market for managers is also competitive. Creating dynamics that lead to larger teams and raises for team members
- Companies allow things like remote work, which is a perk, but also has a lot of abuse in terms of how much work gets done<p>The end result is that if companies are spending their max, if there's a shock to the market/system etc they have to cut. You'd see this less if there was more padding/ less competitive pressure/lower salaries.<p>I think that's fine and the system is working as intended. People should be freed up to move to other roles where they can be productive. Your manager doesn't get upset when you leave, bit weird how people feel so differently when they get fired.<p>The issue is not that you're getting fired. The issue is that healthcare is attached to employment, that makes zero sense. There should also be some reasonable government provided safety net so people can reskill/learn and move to other fields.
Very generous severance packages and companies/laders should be commended for this. If it's a one-and-done big cut with generous packages to save the company, then good on them.<p>Somehow overhiring and maintaining said headcount long enough to need to do a 20% cut is probably less commendable, but not exactly an outlier there in the current climate.<p>I've always wondered about all these standalone "point solution" companies and how durable the model is. In the current climate of reduce M&A, and cost consciousness there is no one to sell to. And as the big platforms - AWS, Azure, GCP continue to grow.. it strikes me that more big companies would rather have a one-stop shop full of 80% solutions than pay for 100 different SaaS.
Remember how there used to be a blog (or maybe it was a Tumblr, I forget) that documented every "Our incredible journey" post that inevitably announced the start-up's closure?<p>I think we need another one for "An update from <company>", as this has seemingly become the standard subject to use when you're announcing layoffs or data breaches. I saw an identical headline earlier today from Sony announcing a studio closure:<p><a href="https://sonyinteractive.com/en/news/blog/an-update-from-playstation-studios/" rel="nofollow">https://sonyinteractive.com/en/news/blog/an-update-from-play...</a>
I'm always a bit confused by profitable companies with (presumably) large reserves laying off lots of people. I get that they want to <i>remain</i> profitable. But sure 500ish people could be put to <i>some</i> use? A new product, a new market, a spinoff. Whatever? Are you telling me that no one in such a big, wealthy company of clever engineers has any use for a bunch of talented people?
Dropbox my one critique is can you please make it affordable again. I just can't justify the cost as there are cheaper services out there. I don't care about PDF signing etc. I fear OneDrive/Google Drive are eating you lunch because it's a hard sell to be competitive against them price wise.
> Impacted employees will be eligible to keep company devices (phones, tablets, laptops, and peripherals) for personal use.<p>It's not often you see this. Netflix used to do this if your equipment wasn't brand new, and with any phone[1]. And the very first startup I worked for let me buy my laptop, desktop, monitor, and cell phone for $50. But you don't see it too often.<p>[1] There was a "joke" at Netflix that if your manager told you that you should upgrade your phone, it meant you were gonna get let go soon, because sometimes people really did get let go just weeks after getting a new phone, and they got to keep the phone.
This is a great severance plan.<p>1. 4 months pay + 1 week per year of tenure.
2. Receive Q4 vests.
3. Upcoming approved leaves paid in cash.
4. Year-end bonuses paid.
5. Keep company devices.
TBH it feels like Dropbox has a pretty fair earnings multiple at the moment (~4X). Have we reached a point where tech companies have been around long enough that they can / should enter a sort of maintenance mode? It feels like there is a company version of the Peter Principle. Why do they (Dropbox specifically) need to continue to "innovate"? Wouldn't it be better for all parties if they just focused on maintaining the best possible version of their core offering at the lowest cost? Maybe Dash (or whatever) will work but most likely it won't, and investing in that initiative puts their whole business at risk.
this is a good deal, better than most retention packages out there.<p>But why is every ceo feels obligated to use this kind of meaningless corpo speak in these emails? "Macro Headwinds", "full responsibility"?
Something weird I noticed about Dropbox:
I cancelled my paid account two years ago. I had 5 terabytes of storage being used (mostly shitty concert vids and food pics).<p>Everyday they email me telling me I’m over my limit. They always “threaten” to delete the data but it’s been two years since I cancelled.<p>My Qs are: why are they hoarding my data for so long? Why would they want to do this? How cheap is storage for them to want to do this? How likely is it that they have sold my data to train various LLMs with?
Company isn’t doing so great and future doesn’t look so great and people cost a lot of money so they are letting folks go who aren’t as valuable. This makes sense.
If you look at its earnings they have appeared to plateau and there isn’t a major offering planned that will change this.<p>I am reminded of Slack which has a similar history of rapid growth followed by a very competitive market and then significant slowing. Maybe Salesforce could acquire Dropbox and bundle it into their offerings or some other similar company?
<i>We’ve heard from many of you that our organizational structure has become overly complex, with excess layers of management slowing us down.</i><p><i>So we're making more significant cuts in areas where we're over-invested or underperforming while designing a flatter, more efficient team structure overall.</i><p>So a lot of middle management getting let go then?
> <i>"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."</i><p>As with other CEOs who say such things in similar situations - does this "responsibility" amount to anything? Like loss of salary or options or seniority. Or is this just empty words?<p>I appreciate that this action is probably necessary to safeguard the business but, as someone who has been at the sharp end of a number of redundancies, I wish leaders would be honest:<p><i>"We tried stuff but it didn't work. I was and am in charge, and I'm staying. We're making you redundant because we need the money more than we need you."</i><p>Obviously no leader would say such a thing. But the people affected (and thas not just those being made redundant) deserve honesty, not platitudes.
For context, Drew Houston's total compensation for the year in 2023 was $1.5M:<p>> According to our data, Dropbox, Inc. ... paid its CEO total annual compensation worth US$1.5m over the year to December 2023. That's a notable increase of 34% on last year<p>via <a href="https://finance.yahoo.com/news/heres-why-dropbox-inc-nasdaq-100904768.html" rel="nofollow">https://finance.yahoo.com/news/heres-why-dropbox-inc-nasdaq-...</a><p>Even if Drew took minimum wage, that would save ~15 jobs assuming $100K all-in comp (which seems low to me for a tech salary). 500 employees is more like $50M/year, and probably more.<p>Of course, Drew Houston's net worth is ~$2B and he could technically loan Dropbox Inc money personally to save the jobs, my guess is a lot of his net worth is actually Dropbox stock that he would have to liquidate and would affect the stock price materially. He would also need to follow insider trading laws too and can't just up and sell vast amounts of stock on a whim. Most executives are on pre-approved schedules to sell any stock to avoid triggering insider trading.<p>The severance package Dropbox is offering is pretty good - 16 weeks of pay + an additional week for each year of tenure, impacted employees get their Q4 equity vest & prorated bonuses, everyone keeps company devices, an offer for extra time + help for people on visas, and job placement help for everyone.<p>Dropbox is a public company that is profitable, but not really growing through their flagship product. No growth is more or less bad on Wall Street. They also haven't really had a major hit since their initial file-sharing product and missed some shots they probably should have hit (mainly vs. Notion with Dropbox Paper, Mailbox acquisition, etc). With many systems moving away from "files" and to "cloud objects" like Figma, Notion, etc, their workhorse product might be going away over time too. They need the time and focus to find that next S-growth curve.<p>Layoffs suck and no one wants to do it, but sometimes it's needed to save the ship.
i wish they would focus on what the users wants instead of making their client more and more invasive, and when I complain about it just explaining that they have a lot of privacy controls and I shouldn’t worry about their invasive client.<p>i would love to use dropbox over icloud, but I just want a drive that works and a way to turn off all their weird features.
The uncomfortable truth is that pretty much any business can cut staff by 20% without impacting overall performance. Provided that you manage to weed out the tail end of the performance bell curve that is.<p>Most of the time, reducing staff is a healthy move for the business and the impacted employees. The company will not only save cost, but strengthen its culture of high performance. And under-achieving employees are often fundamentally unhappy in their role. While the short term impact of being made redundant can cause some distress, these people can still use the occasion to reset their careers.<p>So all in all, no reason for grief.
Kind of surprising to me, because I think I've tried every large competitor in the space, and have found there to be a gulf between the Dropbox UX and everyone else. I'm more than willing to pay their premium price. I was hoping Proton Drive would compete, but I felt like I was beta testing an inferior product.<p>I guess Wu Tang was right.
I don’t know how but over time all the “new fangled” tech companies have the same approach to hiring. They just keep growing headcount as its own workstream. Google started it I think, their HR just interviews and grabs the talent without a need. Matching employees to a role that already got hired to a company is just insane. That is the reason why I never interview with anyone that wants to do a generic hire. These HR folks are purely assessed on how many they hire and so they keep hiring.<p>This just makes me respect the old school processes that apple and nvidia follow that much more. They are the best run companies in tech
It's clear they are preparing for an acquisition. They are profitable with great gross margins and cash in the bank. With 20% workforce reduction they are going to be very attractive to the salesforce of the world.
Not sure if it is relevant but after firing 500 people, the stock price is almost up by 2 dollars between 29th and and 30th October.<p>Next - we have to raise our prices.<p>Probably lazy money invested for gains takes its toll on the rest of the society.
Dropbox makes over 600 M per quarter and about $2.53B per year. They dont need to do layoffs. This is a choice to desctroy jobs to temporarily enrich shareholders to the detriment of the company itself. Classic short-term decision making. <a href="https://stockanalysis.com/stocks/dbx/revenue/" rel="nofollow">https://stockanalysis.com/stocks/dbx/revenue/</a>
This is a stack ranking layoff. They will fill the roles with new roles to teams they believe are more vital to achieving company goals. Pretty much every tech company has operated this way the last couple years. They’ve fired 10-20% and have replaced all those heads pretty much across the board.
Makes sense and was only a matter of time considering it has essentially no revenue growth to date this year and Non-GAAP margins in the low-to-mid 30's %. With near-0% revenue growth, investors will expect a SaaS company to post 40%+ margins.
It seems that after the rampant hiring spree in the 2020s, it could benefit some business leaders to implement 'Founder Mode' in their organizations.<p>Surely that should fix things?
Any easy to migrate to alternative to Dropbox? I don't mind paying, but Linux support and light sync client is a must. And I don't need more than 1GB storage.
> <i>We continue to see softening demand and macro headwinds in our core business</i><p>In plain English it means sales are crashing with no change forecast in the immediate future.
> 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.<p>Ah yes, there it is. Maybe roll yourself into the 20% at least.
Honestly, this doesn't strike me as a bad layoff announcement, with one caveat.<p>I’m writing to let you all know that after careful consideration, we've decided to reduce our global workforce by approximately 20% or 528 Dropboxers.<p>Should be replaced with<p>I’m writing to let you all know that after careful consideration, we've decided to reduce our global workforce by approximately 20% or 528 people.<p>You should never use your pet names for employees in a layoff announcement. It makes an otherwise serious announcement seem tone-deaf.
Kind of crazy that Dropbox has 2600 employees no? What do they all do? Isn't Dropbox finished?<p>I guess there's a very small number maintaining the core Dropbox stuff and most of them are working on speculative projects to increase revenue (e.g. this Dash thing they mentioned)?
Incredibly disappointing, but not surprising. Dropbox is no longer in its growth phase, and needs to settle into maintenance mode - enjoying a steady stream of revenue while continuously optimizing expenses, with a bit set aside for R&D to try and find the next big growth opportunity. Severance packages look really good, with the caveat that these figures really should be _the default_ in Corporate America at this point, like our EU peers.<p>I just wish the language in the announcement reflected this reality. Instead, it feels like a lot of desperation measures from current tech companies: overly optimistic to the point of naively dismissing or ignoring reality, and believing that if we just keep building then we’ll continue to grow forever.
TIL that nobody knows what they're doing.<p>Jokes aside, how do you end up having more than 500 excess people than what you need? What is management exactly doing during the time they went from 1 excess person to 500? Did they just hope the "macroeconomic headwinds" would become tailwinds? Didn't they at some point see that they have more people than valuable work, and maybe we should deal with that problem instead of hiring another team to place even more bets?<p>Actually, I know why. It's because they have too much money and when you have too much cash, you start splurging without thinking and then one day the chickens come home to roost.<p>Honestly, I would not hire a single manager from these big companies because they operate in an environment where they're playing with monopoly money and don't know what reality is. There's something to be said about spending within your limits and not splurging on the next shiny object. Way back when it was called cost control and operating within a budget. All that management theory seems to have been lost in the age of cash injections and valuations based on everything except retained earnings.
>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.<p>But I will be glad to see that my salary and bonus increased a bit this year :)
Crowded space, macro headwinds and too much middle management. It was difficult to foresee in 2020, but regarding the macro headwinds (elephant in the room) perhaps some billionaires should adjust their donation patterns:<p><a href="https://www.forbes.com/sites/michelatindera/2021/02/17/here-are-the-billionaires-who-donated-to-joe-bidens-2020-presidential-campaign/" rel="nofollow">https://www.forbes.com/sites/michelatindera/2021/02/17/here-...</a>
I'm surprised that a company like Dropbox needs so many employees. ~500 being 20% implies the total workforce is 2500 people. HOW?!<p>I feel like the product could do just fine with 100 employees.