Dropbox is reducing its workforce by 20 percent following its latest round of layoffs

“We are making more significant cuts in areas where we have over-invested or are underperforming, while also designing a flatter and more efficient team structure,” writes Dropbox CEO Drew Houston in a blog post titled Update from Drew. At the same time, Houston mentions that the market is moving toward where the company has made its “biggest assumptions,” which includes Dropbox’s Dash AI search engine.

Dropbox reported its results for the second quarter of this year in August an increase of 63,000 paid users quarter-on-quarterwhich is petite compared to the total user base of over 18 million users. As reported TechCrunchthe second quarter was Dropbox’s slowest growth in the company’s history, and its stock lost more than 20 percent of its year-to-date value in August.

Houston says Dropbox will say more in the coming days about its 2025 strategy to grow its core business and accelerate recent product launches. Affected employees will receive sixteen weeks of severance pay, equity, bonus plan lump sums, approved leave payments and immigration counseling for those on work visas. Dropbox says most of the payouts will occur in the fourth fiscal quarter of 2024.