Dropbox, a tech firm based in San Francisco, U.S. state of California, announced on Wednesday the company is cutting its workforce by approximately 20 percent amid the slowdown in growth within the cloud storage sector.
The restructuring will result in 528 layoffs for the tech firm, which reduced its employee count by around 500 last year.
In a blog post, Dropbox CEO Drew Houston said the company is making significant cuts in areas where it is “over-invested or underperforming,” to create a more efficient organizational structure.
“We continue to see softening demand and macro headwinds in our core business. 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 wrote in the post.
Houston said the company is in the process of shifting resources and refocusing on new products, including its “Dash for Business” artificial intelligence search engine.
“This market is moving fast and investors are pouring hundreds of millions of dollars into this space. This both validates the opportunity we’ve been pursuing and underscores the need for even more urgency, even more aggressive investment, and decisive action,” Houston noted.
In August, Dropbox reported a quarterly gain of 63,000 paid users, its slowest growth ever compared to its total user base of over 18 million, and its share value declined more than 20 percent year to date.