Dropbox Lays Off 16% Of Its Staff, To Hire New Employees With AI Skills
In a fresh round of cuts, tech company Dropbox has reportedly laid off 16% of its employees.
Cloud storage company Dropbox has announced that it will be laying off 16% of its staff, which is equivalent to about 500 employees. The company attributed the layoffs to slowing growth and the emergence of the AI era of computing. Dropbox CEO and co-founder Drew Houston made the announcement in a memo to staff, stating that the company is taking a preemptive step to cut jobs and invest in new areas to keep up with the rapidly changing technological pace.
As per TechCrunch, the layoffs will cost the company approximately $37 million to $42 million, which will be recorded in the second quarter. Despite this, the company's first-quarter results, which will be reported on May 4, are expected to be in-line with or even above expectations. The CEO explained that while the business is profitable, growth has been slowing due to the natural maturation of existing businesses as well as the economic downturn that has put pressure on customers and, in turn, on the business.
According to Houston, the emergence of the AI era of computing is also a major factor in the layoffs. He stated that AI will give Dropbox new superpowers and completely transform knowledge work, adding that the company has been building towards this future for a long time.
Impacted staff were notified about the layoffs by Thursday, April 27, and expected to wrap up their work by Friday, April 28. TechCrunch reports that Dropbox had 3,125 employees prior to the layoffs. This layoff comes as part of a broader trend, with more than 184,000 people being laid off in the tech sector in 2023 across nearly 620 companies, as per data from the Layoffs.fyi tracker.
Investing in New Areas
Despite the layoffs, Dropbox plans to hire new employees with AI skills. The company believes that AI is the future and that investing in this area will enable it to remain competitive in the market. The AI skills that Dropbox is looking for include machine learning, natural language processing, and computer vision.
Dropbox has been working on AI-related projects for some time, and this year's product pipeline will demonstrate its commitment to this area. The company believes that AI will give it new superpowers and transform knowledge work, making it more efficient and effective. However, this transformation requires investment, and the company is taking a proactive approach to cut costs and invest in new areas.