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May 8, 2016 06:00 pm

Dropbox Cuts Several Employee Perks as Silicon Valley Startups Brace For Cold

Not everything is working out at Dropbox, popular cloud storage and sharing service, last valued at $10 billion. Business Insider is reporting a major cost cutting at the San Francisco-based company. As part of it, the publication reports, Dropbox has cancelled its free shuttle in San Francisco, its gym washing service, pushed back dinner time by an hour and curtailed the number of guests to five per month (previously it was unlimited). These cuttings will directly impact Dropbox's profitability. According to a leaked memo, obtained by BI, employee perks alone cost the company at least $25,000 a year for each employee. (Dropbox has nearly 1,500 employees.) From the report: Dropbox isn't the only high-profile startup to unleash a company wide cost-cutting campaign lately. A number of unicorn startups, worth over $1 billion, including Evernote, Jawbone, and Tango, have all gone through some form of cost cuts, whether layoffs, office closures, or reduced employee perks. [...] A lot of this has to do with the slowing venture funding environment in Silicon Valley. Investors have become much more conservative with their money lately, and are losing patience for startups that have failed to generate returns after years of free spending. For Dropbox, the cost cuts may have less to do with the state of the VC market than with its own ambitions. Dropbox CEO Drew Houston has repeatedly said in the past that he doesn't need to raise capital in the private market anymore. Instead, Dropbox may want to show investors that its business is strong enough to IPO.

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