Dropbox will lay off 20% of its global workforce, the equivalent of 528 roles, CEO Drew Houston announced Wednesday in a note to staff.

The company is in a “transitional period” as its file sync and share business and its Dash artificial-intelligence search feature mature, Houston wrote.

“Navigating this transition while maintaining our current structure and investment levels is no longer sustainable,” he said in his note.

The move follows a 16% cut to Dropbox’s workforce in April 2023, which also impacted 500 staffers. At the time, Houston wrote the cuts were due to slowing growth, economic headwinds and the need to invest more resources and headcount into the increasingly competitive AI race.

Dropbox will be making cuts to the parts of its business where the company is “over-invested or underperforming” while working towards a “flatter, more efficient” team structure, Houston wrote.

“We continue to see softening demand and macro headwinds in our core business,” Houston wrote. “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.”

Impacted employees will receive sixteen weeks of pay, starting Wednesday, with one additional week of pay for each completed tenure year at the company.

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