San Francisco-based Dropbox announced Thursday it will be laying off 500 employees — 15% of its staff — citing a need to shift the company's focus to artificial intelligence as one reason for the cutbacks.
In a letter to employees, CEO Drew Houston explained that the company would need to quickly capitalize on market opportunities in AI, and to do this the company would need to draw back from some areas to hire more experts in the AI field.
“The AI era of computing has finally arrived. We’ve believed for many years that AI will give us new superpowers and completely transform knowledge work. And we’ve been building towards this future for a long time, as this year’s product pipeline will demonstrate.
“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. However, this momentum has also alerted our competitors to many of the same opportunities.
“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 did not go into specifics about the opportunities this new wave of advancement in AI will present to its core business of providing cloud storage, however other companies in the cloud space like Google have outlined ways to use generative AI for use cases like securing cloud data.
Houston's letter also detailed that employees let go by Dropbox would receive 16 weeks severance pay plus an additional week for each year of service.
