Dropbox cutting 16% of staff, shifting focus to AI

Hundreds of jobs are on the chopping block at Dropbox as the tech company sets its sights on artificial intelligence (AI).

In a recent memo to staff, CEO Drew Houston said he made the “difficult decision” to lay off 500 employees, or approximately 16 per cent of the company’s global workforce.

Shared the difficult decision to reduce our workforce with the Dropbox team today. We’re committed to supporting those affected, and I’m deeply grateful for their contributions. https://t.co/Q1F8XaAof3

— Drew Houston (@drewhouston) April 27, 2023

“In an ideal world, we’d simply shift people from one team to another. And we’ve done that wherever possible,” Houston said.

“However, our next stage of growth requires a different mix of skill sets, particularly in AI and early-stage product development. We’ve been bringing in great talent in these areas over the last couple years and we’ll need even more.”

The reduction comes as Dropbox takes steps to streamline its business, including consolidating its Core and Document Workflows businesses.

“These transitions are never easy, but I’m determined to ensure that Dropbox is at the forefront of the AI era, just as we were at the forefront of the shift to mobile and the cloud,” Houston added.

“We’ll need all hands on deck as machine intelligence gives us the tools to reimagine our existing businesses and invent new ones.”

According to LinkedIn, the company employs a global workforce of more than 3,700 people — with nearly 130 staff members located in Canada.

Impact on Canadian staff

Dropbox didn’t disclose how many Canadian employees are affected by the latest round of cuts.

While the company doesn’t have a Canadian headquarters, it has workers in major cities across the country, including Toronto and Vancouver.

Major tech layoffs continue

Dropbox joins the growing list of major North American tech companies that have announced sweeping layoffs in 2023.

Several big names, including Lyft, Meta, Amazon, Kyndryl, Electronic Arts, Alphabet, Dell, Clearco, and Microsoft, are significantly scaling back their staffing levels as they continue to navigate challenging economic conditions.

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• Layoffs in Canada

Termination agreements for Dropbox employees

As part of the layoff announcement, Houston said affected Dropbox employees will:

• Be eligible for 16 weeks of severance pay, with one additional week of pay for each completed year of tenure at the company.
• Receive their Q2 equity vest.
• Be eligible for up to six months of COBRA in the U.S., and similar healthcare equivalents where applicable internationally.
• Be eligible to keep company devices (i.e. phones, tablets, laptops, and peripherals) for personal use.
• Have access to job placement services and career coaching for free.

However, Canadian workers could be owed significantly more compensation than Dropbox’s initial offer.

In Canada, non-unionized employees at the tech company are owed full severance pay when they lose their jobs due to downsizing or corporate restructuring.

This includes individuals working full-time, part-time, or hourly in Ontario, Alberta, and B.C.

Severance can be as much as 24 months’ pay, depending on a number of factors.

LEARN MORE
• Severance for technology industry employees
• Severance for provincially regulated employees
• Severance packages in mass layoffs

WATCH: Employment lawyer Lior Samfiru explains why you are still owed severance if you have been downsized on an episode of the Employment Law Show.

Before you accept any severance offer, have an experienced employment lawyer at Samfiru Tumarkin LLP review it and your employment contract.

We can tell you if what you have been provided is fair and how to get proper severance if it falls short of what you are actually owed.

If you don’t receive the full amount, which happens often, you have been wrongfully dismissed and are entitled to compensation.