Dropbox shares tumbled on Wednesday after the document management software firm announced it would shrink a workforce that it has been shifting to work-from-home.
CEO Drew Houston called the decision to lay off 315 employees, or about 11% of the workforce, “one of the toughest” he has made in his 14 years as chief executive.
“The steps we’re taking today are painful but necessary,” he told employees in an email. “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.”
Dropbox’s “virtual first” remote-work policy, he added, “means we require fewer resources to support our in-office environment.”
On news of the layoffs, Dropbox shares fell 6.3% to $22.12.
As The Wall Street Journal reports, “Dropbox is among a small but growing cadre of employers embracing the deskless post-pandemic trend.” The company told staffers last year that it will declare offices near San Francisco and elsewhere essentially off-limits to individual work.
“Virtual first” aims to transform the company’s offices into “Dropbox Studios,” where workers meet up with colleagues for better collaboration and community building. It has also encouraged workers to draw their own work schedules beyond the core collaboration hours defined by the company, in an effort to push flexible working.
Dropbox went public in 2018 as a $9.2 billion company, slightly lower than its private value estimate. It announced its first profitable quarter in May 2020, driven in part by the shift to online work during the coronavirus pandemic.
“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 said.
He identified the top priorities for 2021 as, among other things, “evolving the core Dropbox experience that hundreds of millions of customers around the world rely on” and “investing in new products built for distributed work.”
“We have a huge opportunity in front of us as long as we move quickly and deliver for our customers,” Houston said.