Cuts span engineering, product and corporate teams
Co-CEO Ashraf Alkarmi told employees that about 200 positions would be eliminated across engineering, product, design, and general and administrative teams. For most affected employees, October 28 would be their final day. Alkarmi said he and the senior leadership team accepted full responsibility for the decision.
In the memo published by The Times of India, Alkarmi described Dropbox as profitable and said it had gained momentum during the year. Its two-year strategy calls for addressing more critical customer workflows, reaching more of its target customers, including larger companies, and taking its technology into new markets.
Alkarmi said those goals require Dropbox to narrow its investments and simplify, reduce or end some work. Rather than "take the same work and spread it across fewer people," he said, the company would streamline teams and direct resources toward the product areas with the greatest impact on customers and the business.
Employee severance and transition support
The departure package starts with 16 weeks of pay from the announcement date, with another week for every completed year of service. Packages outside the United States will follow local practices and legal requirements. Employees are also eligible for fourth-quarter equity vesting, while those on the Corporate Bonus plan will receive a prorated lump sum tied to their 2026 bonus target. Dropbox will provide immigration assistance to affected visa holders.
Eligible U.S. employees who elect COBRA coverage will receive a six-month subsidy. Access to Modern Health will run through the end of the month in which an employee separates, with extension options explained in the severance packages. Dropbox will also pay for eligible current paid leaves and approved upcoming paid leaves, including medical and family leave.
Departing employees may retain one Dropbox laptop, one assigned mobile device and their existing desktop peripherals. The company will offer job placement services and career coaching at no charge.
Dasdan's departure and separation agreement
Alkarmi said Dasdan had decided to leave and would work on the transition through his November 18 departure. He credited the CTO with strengthening technical capabilities that Dropbox expects to use in its next phase.
Dropbox's October 28 Form 8-K sets out a separation agreement providing Dasdan with a $515,000 pro rata bonus and approximately $1.3 million in a lump-sum cash payment. He will also receive benefits consistent with those offered to other departing employees, plus severance under his previously disclosed change-in-control and severance agreement.
The departure follows a change at the top in May, when co-founder and CEO Andrew Houston stepped down and company insider Alkarmi took over as CEO.
Fourth workforce reduction since 2021
The latest announcement marks Dropbox's fourth round of job cuts since January 2021, according to the independent Dropbox Watchdog layoff tracker, which cites CNBC reporting and company SEC filings. The earlier rounds eliminated about 11% of staff, or 315 roles, in January 2021; about 16%, or roughly 500 roles, in April 2023; and about 20%, or 528 roles, in October 2024. Each of those three rounds was larger than the previous one as a share of the workforce.
Staffing had also declined year over year before the latest cuts. The tracker, citing Dropbox's Form 10-K filings, puts full-time headcount at 2,204 at the end of 2024 and 2,113 at the end of 2025. Reuters also reported the 2,113 figure.
Restructuring costs and earnings outlook
The Times of India reported that Dropbox expects expenses of $27 million to $33 million from the workforce reduction, mainly for severance and related termination costs. Separately, the company's Form 8-K puts expected incremental expense at $20 million to $25 million. Dropbox expects to recognize substantially all of that incremental expense and make most related cash payments in the fourth quarter of 2026, with the balance recognized and paid in 2027.
For comparison, the October 2024 layoffs carried estimated total cash expenditures of $63 million to $68 million and incremental expense of $47 million to $52 million, according to the SEC filing reported by TechCrunch.
Dropbox also said on October 28 that preliminary, unaudited information indicated its third-quarter 2026 revenue, constant-currency revenue and non-GAAP operating margin would meet or exceed the guidance ranges it had previously issued. The company is scheduled to release those results on November 5, 2026.
