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

Phrases don’t appear to imply something today. Dropbox CEO Drew Houston this week advised 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 choice and the circumstances that led to it, and I’m really sorry to these impacted by this transformation,” wrote Houston in response to The Register.

“I do know that is extremely tough and unwelcome information. To everybody leaving Dropbox, I’m deeply grateful for the whole lot you’ve finished 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 will additionally hold their work computer systems. Dropbox reduce 16% of workers in 2023 amid a wave of cuts throughout the trade following years of overgrowth throughout the pandemic. Income progress has been sluggish at Dropbox, within the single-digits extra lately.

Dropbox began as a smooth and simple technique to back-up recordsdata on-line, however has not fairly been the foremost success story that was as soon as hoped. To make sure, 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 a part of a fast-growing tech firm. Dropbox’s inventory is down 10% in 2024, which is dangerous for employees at these firms as their pay is usually heavily-weighted in direction of shares.

Leaders usually 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 not often does “taking accountability” truly quantity to a lot of something. Probably the most notable current instance is maybe that Microsoft CEO Satya Nadella requested the corporate’s board to scale back his pay in gentle of the foremost Crowdstrike hack. However in that case, his general compensation nonetheless elevated for the yr by $30 million. Simply, a bit much less up.

Houston as a co-founder of Dropbox holds round 20% of the fairness within the firm, and may’t so simply be eliminated. However for different leaders, one argument made to assist these massive 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 loads of flak after making a massacre at his firm throughout the pandemic, slicing massive swaths of the group. It’s important to marvel if another CEOs would truly be in such excessive demand although. Perhaps Nadella or Zuckerberg’s compensation is justified nevertheless 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 provide 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 continues to be very a lot out on whether or not it’s useful).

It’s laborious for an organization like Dropbox to compete towards the massive guys, nevertheless it’s been investing in its Sprint AI search device that’s purported to make it straightforward to look throughout varied productiveness apps.