“We are making significant cuts in areas where we have overinvested or underperformed, while designing a flatter, more efficient team structure overall,” wrote Dropbox CEO Drew Houston in a blog post titled An update from Drew. At the same time, Houston mentions that the market is moving toward where the company has placed its “biggest bets,” including Dropbox’s Dash AI search product.

For this year’s second quarter results in August, Dropbox reported an increase of 63,000 paid users quarter-over-quarter, which is light compared to its total user base of over 18 million users. As reported by TechCrunchThe second quarter marked Dropbox’s slowest growth in the company’s history, and its shares lost more than 20 percent of their value year to date in August.

Houston says Dropbox will say more in the coming days about its 2025 strategy to grow its core business and accelerate new products. Affected employees will receive 16 weeks of severance pay, equity, lump sum bonus amounts, approved leave payments and immigration advice for those on work visas. Dropbox says most payouts will occur in the fourth quarter of 2024.