Dropbox writes down real estate value in transition to remote working

Dropbox writes down real estate value in transition to remote working

Dropbox writes down real estate value in transition to remote working

FILE PHOTO: The Dropbox app logo seen on a mobile phone in this illustration photo October 16, 2017. REUTERS/Thomas White/Illustration

(Reuters) – Dropbox on Thursday posted a bigger fourth-quarter loss, hit by about $400 million of impairment charges on its real estate assets as the file hosting service transitions to a ‘virtual first’ working model and prepares to sublease parts of its offices.

The San-Francisco firm is one of the many technology companies to make work from home a permanent arrangement for employees after the trend rose during coronavirus lockdowns, reducing the need for large offices.

“As part of the Virtual First strategy, we will retain a portion of our office space to be used for team collaboration and a portion will be marketed for sublease,” Dropbox said.

Social networks Twitter Inc and Facebook Inc and payments firm Square Inc also let people work from home permanently starting May last year.

Facebook Chief Executive Mark Zuckerberg had said then that he expects half the company’s workforce would eventually do their jobs outside offices in five to 10 years.

Dropbox, which last month laid off 11% of its workforce saying it now needs fewer resources, said on Thursday its net loss widened to $345.8 million in the three months ended Dec. 31, from $6.6 million last year.

On an adjusted basis, it earned 28 cents per share, beating analysts’ average estimate of 24 cents, according to Refinitiv IBES, helped by more than a million new paying users and higher average revenue from each of them.

Reporting by Shariq Khan in Bengaluru; Editing by Maju Samuel