Dropbox Cuts 16% of Staff − CEO Blames AI’s Rise

File-sharing platform Dropbox is laying off 500 staff - or 16% of its workforce - with CEO Drew Houston citing the rise of AI and economic headwinds for the decision.

A memo penned by Houston said that while the company remains profitable, growth has slowed due to the economic downturn as well as its business maturing.

But “more consequentially, the AI era of computing has finally arrived” and Dropbox is reorganizing around this new focus, the CEO wrote. That means the company needs a “different mix of skill sets” than what it current has, particularly in AI and early-stage product development.

The Dropbox CEO said the opportunity to seize AI is “greater than ever, but so is our need to act with urgency to seize it.”

The reorganization also includes consolidating its Core and Document Workflows businesses and it is also “realigning and refocusing our business teams to reflect proportionate adjustments to the product development teams they support.”

Yet another tech layoff

Dropbox is the latest tech company to announce layoffs. Meta is still completing its 10,000 layoff plan, announced in March, which followed 11,000 job cuts announced last winter.

Google laid off some 12,000 staff in January to shift the company’s focus on incorporating AI into its highest-priority product areas.

Microsoft did the same, laying off 10,000 people, or 4.5% of its global workforce. These firings included its AI ethics team as senior executives sought to speed up AI integrations of models from OpenAI.

Snapchat parent Snap Inc. let go of 20% of its workforce last August following the tripling of its net loss.

And since taking over Twitter, Elon Musk has overseen a mass exodus of staff, including firing top management and slashing the workforce from 7,500 to around 2,000 in a bid to cut costs.

Other tech companies that have announced mass layoffs include Amazon, Lyft, Apple, and GitHub.