diff --git a/src/cmds/restic/testdata/small-repo.tar.gz b/src/cmds/restic/testdata/small-repo.tar.gz
index 83959f539..92ce87962 100644
Binary files a/src/cmds/restic/testdata/small-repo.tar.gz and b/src/cmds/restic/testdata/small-repo.tar.gz differ
diff --git a/src/restic/backend/layout_default.go b/src/restic/backend/layout_default.go
index 9b57657b5..daedb610d 100644
--- a/src/restic/backend/layout_default.go
+++ b/src/restic/backend/layout_default.go
@@ -1,6 +1,9 @@
 package backend
 
-import "restic"
+import (
+	"encoding/hex"
+	"restic"
+)
 
 // DefaultLayout implements the default layout for local and sftp backends, as
 // described in the Design document. The `data` directory has one level of
@@ -49,11 +52,18 @@ func (l *DefaultLayout) Filename(h restic.Handle) string {
 	return l.Join(l.Dirname(h), name)
 }
 
-// Paths returns all directory names
+// Paths returns all directory names needed for a repo.
 func (l *DefaultLayout) Paths() (dirs []string) {
 	for _, p := range defaultLayoutPaths {
 		dirs = append(dirs, l.Join(l.Path, p))
 	}
+
+	// also add subdirs
+	for i := 0; i < 256; i++ {
+		subdir := hex.EncodeToString([]byte{byte(i)})
+		dirs = append(dirs, l.Join(l.Path, defaultLayoutPaths[restic.DataFile], subdir))
+	}
+
 	return dirs
 }
 
diff --git a/src/restic/backend/layout_test.go b/src/restic/backend/layout_test.go
index 48bc2a3db..ff6378299 100644
--- a/src/restic/backend/layout_test.go
+++ b/src/restic/backend/layout_test.go
@@ -111,6 +111,10 @@ func TestDefaultLayout(t *testing.T) {
 			filepath.Join(tempdir, "keys"),
 		}
 
+		for i := 0; i < 256; i++ {
+			want = append(want, filepath.Join(tempdir, "data", fmt.Sprintf("%02x", i)))
+		}
+
 		sort.Sort(sort.StringSlice(want))
 		sort.Sort(sort.StringSlice(dirs))