Dropbox is laying off 500 employees, representing about 16 per cent of the company's global workforce, as the cloud storage and software company focuses on driving artificial intelligence.
The cuts mean the San Francisco-based company is freeing up investment for future growth and momentum around AI.
"I want to recognise the impact this decision has on Dropboxers who are affected and their families, and I take full ownership of this decision and the path that led us here," said CEO Drew Houston in a message to employees today. "While our business is profitable, our growth has been slowing."
"The AI era of computing has finally arrived," Houston said. "The opportunity in front of us is greater than ever, but so is our need to act with urgency to seize it.
"Over the last few months, AI has captured the world's collective imagination, expanding the potential market for our next generation of AI-powered products more rapidly than any of us could have anticipated."
In an ideal world, Houston said Dropbox would simply shift employees from one year to another. However, he said its "next stage of growth requires a different mix of skill sets, particularly in AI and early-stage product development. We've been bringing in great talent in these areas over the last couple years and we'll need even more."
Houston said transitions are never easy, "but I'm determined to ensure that Dropbox is at the forefront of the AI era, just as we were at the forefront of the shift to mobile and the cloud. We'll need all hands on deck as machine intelligence gives us the tools to reimagine our existing businesses and invent new ones."
‘Economic downturn' put pressure on Dropbox customers
In addition to its shift towards AI innovation, Houston also said the 500 layoffs are, in part, due to the "economic downturn," which has put pressure on Dropbox customers.
"In some areas, investments that showed promise before the downturn have more limited potential today. In others, we haven't been executing consistently or managing performance as tightly as we need to," he said. "So we've made more significant cuts in these areas in order to free up investment in our future growth."
Dropbox employees impacted by the layoffs were alerted yesterday. "To all of you impacted by today's news, we're committed to doing as much as we can to take care of you through this transition," Houston said.
The tech layoffs of 2023
Dropbox is just the latest in a slew of tech companies of all shapes and sizes who have conducted hundreds, sometimes tens-of-thousands, of layoffs in 2023.
Google announced plans to cut 12,000 employees this year, Microsoft will lay off 10,000 and Amazon is laying off 27,000 employees, including some at Amazon Web Services.
And just this week, Red Hat revealed similar cuts to Dropbox as the open source software company lays off nearly 800 employees, or 4 percent of the company's global workforce.
