Dropbox to lay off 16 percent of its workforce as it pivots towards AI projects

The mass layoffs that have affected nearly everyone in the tech industry claimed another company today. The cloud storage and collaboration company Dropbox announced it would lay off 16 percent of its workforce, or about 500 of its employees.

In a blog post today, Dropbox's co-founder and CEO Drew Houston stated that while the company remains profitable, it has seen its growth slow down in recent times. Also, he stated that the greater growth of AI-driven products and services has caused the company to put more emphasis on projects that use AI. He added:

In an ideal world, we’d simply shift people from one team to another. And we’ve done that wherever possible. However, our 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 Dropbox will also make cuts in other areas of the businesses that he says "haven’t been executing consistently or managing performance as tightly as we need to."

The laid-off employees will all get 16 weeks of severance pay, along with one additional week for each year they have been working at Dropbox, They will also get six months of health insurance, and they will be able to keep any company devices they have used for personal use.

This is not the first time in recent memory Dropbox has made these kinds of cuts. In January 2021, it announced an 11 percent reduction in its workforce, affecting 315 employees. Today's cuts join with many other big tech businesses with large layoffs at Microsoft, Amazon, Meta, Google, and more.

Dropbox to lay off 16 percent of its workforce as it pivots towards AI projects