Dropbox CEO ‘Takes Full Accountability’ as He Fires 500 Folks

Phrases don’t appear to imply something today. Dropbox CEO Drew Houston this week instructed workers he takes “full accountability” as he introduced a spherical of layoffs affecting 500 employees. He’s, so far as we will inform, remaining on as CEO and continues to carry a multiple-billion greenback possession stake within the cloud storage firm.

“As CEO, I take full duty for this determination and the circumstances that led to it, and I’m actually sorry to these impacted by this variation,” wrote Houston in keeping with The Register.

“I do know that is extremely troublesome and unwelcome information. To everybody leaving Dropbox, I’m deeply grateful for every part you’ve carried out for our firm and our prospects.”

Staff affected by the cuts will obtain a minimal of sixteen weeks’ pay and their inventory grants for This fall 2024 will vest. They’ll additionally hold their work computer systems. Dropbox reduce 16% of workers in 2023 amid a wave of cuts throughout the business following years of overgrowth in the course of the pandemic. Income development has been sluggish at Dropbox, within the single-digits extra just lately.

Dropbox began as a glossy and straightforward approach to back-up recordsdata on-line, however has not fairly been the most important success story that was as soon as hoped. To make certain, it has a market worth of over $8 billion. That’s spectacular however not the extent of homerun that buyers and workers hope for after they signal as much as be part of a fast-growing tech firm. Dropbox’s inventory is down 10% in 2024, which is unhealthy for staff at these firms as their pay is commonly heavily-weighted in direction of shares.

Leaders typically declare that they’re taking accountability after they screw up—and they need to, as CEOs like Houston are those who mismanaged the corporate to the purpose of requiring layoffs within the first place. However hardly ever does “taking accountability” truly quantity to a lot of something. Essentially the most notable current instance is probably that Microsoft CEO Satya Nadella requested the corporate’s board to cut back his pay in gentle of the most important Crowdstrike hack. However in that case, his total compensation nonetheless elevated for the yr by $30 million. Simply, slightly much less up.

Houston as a co-founder of Dropbox holds round 20% of the fairness within the firm, and might’t so simply be eliminated. However for different leaders, one argument made to help these giant compensation packages is that their jobs require taking the brunt of powerful selections, and that they might be in excessive demand at different firms. Meta’s Mark Zuckerberg took quite a lot of flak after making a massacre at his firm in the course of the pandemic, slicing giant swaths of the group. It’s a must to marvel if another CEOs would truly be in such excessive demand although. Possibly Nadella or Zuckerberg’s compensation is justified however it’s more durable to say Houston would fetch a excessive mega-package elsewhere.

Dropbox for years has been outgunned by its larger rivals that equally supply cloud storage however at a a lot bigger scale. It additionally faces elevated competitors in productiveness software program from the likes of Google and Microsoft, which have been investing closely in AI that’s supposed to assist folks work extra productiveness (the jury remains to be very a lot out on whether or not it’s useful).

It’s onerous for a corporation like Dropbox to compete towards the massive guys, however it’s been investing in its Sprint AI search device that’s speculated to make it simple to go looking throughout numerous productiveness apps.