Those employees were costing more than the value they were creating.
If the marginal product of labor is lower than the marginal cost of labor, the company should reduce headcount. If higher, the company should increase headcount.
Whether in the long term this is net-beneficial for a given actor in the typical case, is at best unclear. This marginal-labor-cost/benefit-in-a-given-moment accounting misses a large proportion of the harmful effects of a layoff.
When a bunch of companies in one sector do it, it does lower wages and reduce labor power to e.g. demand better working conditions. That part, is a benefit for companies. But it's not the result of one company doing what's best for their particular situation—it's a result of coordination, even if only by the understanding that "this is what you do, when there's an excuse to, and especially when you see others doing it". It's merely best practice then, not... collusion.
Arguably the value they were creating was influenced by the direction and application that labor was directed at. Redirecting that available labor at something more valuable would fix that as well wouldn't it?
Yes, if there is something more valuable to redirect the labor to and my intuition is that there is not, I mean not in the Dropbox business.
2640 employees seems like a ridiculous number for a company like Dropbox. I work at a company that's about half of that and you wouldn't believe how many different services this company runs and I still think there's a lot of inefficiency.
If companies wanted efficiency, they coould probably spend $400k to 10 engineers and get the best of all worlds. That's going to be cheaper than hiring a team of 50 @100k of varying quality.
Except when the engineer leaves for a $500k postion. Companies basically moved towards this churn market in a way not as far off from an assembly line as you'd expect. They prefer some inefficiency if the cogs are easier to replace every 1-2 years.
Yes, but not in a way that blames the workers. If a product improves but margins don't (because say, interest rates), you have employees who all perfomed above expectations that can still get taken off because the current environment can't make money on anything through consumers (who are getting less buying power and cutting non-essential services).
I'd hope tech workers on a community like this could empathize with other tech workers in such an environment.
If the marginal product of labor is lower than the marginal cost of labor, the company should reduce headcount. If higher, the company should increase headcount.