🤯 Have you seen our AI stock pickers’ 2024 results? 84.62%! Grab November’s list now.Pick Stocks with AI

Dropbox to cut 20% of workforce, updates guidance

Published 10/30/2024, 10:39 AM
© Reuters.
DBX
-

Investing.com -- Dropbox shares rose over 4% Wednesday after the company announced it will reduce its global workforce by approximately 20% as part of efforts to streamline operations and better align with long-term growth and profitability goals.

Dropbox (NASDAQ:DBX) expects the 528 layoffs to result in total cash expenditures of between $63 million and $68 million, with most of the costs related to severance payments, employee benefits, and related expenses.

The company added that it anticipates recognizing between $47 million and $52 million in incremental expenses related to the restructuring. The costs will be largely recognized in the fourth quarter of 2024, with the remaining impact reflected in the first half of 2025.

The workforce reduction marks another strategic move as Dropbox seeks to enhance operational efficiency. In a letter to employees, CEO Drew Houston acknowledged the difficult decision, emphasizing the need for structural changes to better align with the company’s evolving objectives.

"We continue to see softening demand and macro headwinds in our core business," said Houston. "But external factors are only part of the story. We’ve heard from many of you that our organizational structure has become overly complex, with excess layers of management slowing us down."

He added that "in some parts of the business, we’re still not delivering at the level our customers deserve or performing in line with industry peers." As a result, the company is making more significant cuts in areas where it feels it is over-invested or underperforming "while designing a flatter, more efficient team structure overall."

In addition to the restructuring announcement, Dropbox provided an update on its third-quarter 2024 financial results. The company said it expects results to meet or exceed its previous guidance for revenue, constant currency revenue, and non-GAAP operating margin.

The company will report its Q3 results on November 7, 2024.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.