Drew Houston, co-founder and CEO of Dropbox, spoke at CNBC’s @Work conference in San Francisco on November 4, 2019.
Arun Nevader | CNBC
Dropbox on Thursday reported a single charge of $ 398.2 million in the fourth quarter to reflect the company’s shift to remote work.
When the coronavirus emerged in the United States last year, companies closed offices and pushed their employees to work from home. Some companies observed that remote work did not hurt and in some cases helped productivity and employee satisfaction, and tried to make it more permanent. This can be costly for companies with significant real estate footprints.
Dropbox, which manufactures cloud-based storage and productivity software and is known for its luxurious office space in San Francisco’s South of Market neighborhood, announced its “virtual first” remote work plan in October.
“Remote work (outside of an office) will be the primary experience for all employees and the default day-to-day for individual work,” Dropbox said in a blog post. Some office space will remain to collaborate and Dropbox will sublease part of the space.
During the first, second and third quarters of 2020, Dropbox reported a net profit after years of losing money. The impairment charge for “rights-related assets and other leases” that Dropbox disclosed in its fourth-quarter profit and loss account reverses this streak, which resulted in a loss of nearly $ 346 million for the company, compared to a profit of $ 33 million a quarter.
The charge was excluded from non-GAAP results, which reflected earnings per share of 28 cents, up from 16 cents in the previous year’s quarter, and exceeded the consensus of 24 cents per share expected by analysts surveyed by Refinitiv . Dropbox shares fell 1% in expanded trading.
Before Dropbox pledged to get its people to work remotely, tech companies like Atlassian, Twitter and Zillow had said they would allow employees to continue working from home even after the pandemic subsides. Earlier this month, Salesforce, San Francisco’s largest employer, said most of its employees will be in offices one to three days a week once enough to return.
In October, after thousands of its employees had become accustomed to working without being with their colleagues, Pinterest said it had agreed to pay $ 89.5 million to stop a 490,000-foot lease. office squares near the San Francisco headquarters. That way, he wouldn’t have to pay at least $ 440 million in rent.
I WILL SEE: Dropbox CEO in the “virtual first” initiative for employees to work from home