Dropbox is laying off 20% of its workforce, eliminating a total of 528 jobs, the software company said Wednesday.

In a memo to staff, CEO Drew Houston told employees the company is in a “transitional period” as they work to “build our next phase of growth.”

“While I’m proud of the progress we’ve made in the last couple years, in some parts of the business, we’re still not delivering at the level our customers deserve or performing in line with industry peers,” Houston wrote. “So we’re making more significant cuts in areas where we’re over-invested or underperforming while designing a flatter, more efficient team structure overall.”

The company cut 500 roles in a previous round of layoffs in April 2023.

Employees who lose their jobs in the latest cuts will receive 16 weeks of pay with an additional week for each year they spent with the company.

Houston said he would be holding several town hall meetings to discuss the matter and the company’s future plans, including how its investment in artificial intelligence relates to its file-sharing business.

“I know this is incredibly difficult and unwelcome news,” he wrote. “To everyone leaving Dropbox, I’m deeply grateful for everything you’ve done for our company and our customers.”

Dropbox stock has fallen 9% in the year to date, according to Market Watch.

The layoffs are the latest in an ongoing trend in tech since 2020. The industry at large has steadily contracted over the last several years after a pandemic-fueled hiring spree, with hundreds of thousands of jobs being cut.

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