Dropbox Announces Layoffs Due to Slowing Growth and Arrival of AI Era of Computing
Dropbox lays off 500 employees, 16% of staff, CEO says due to slowing growth and ‘the era of AI’
Dropbox Announces Layoffs Due to Slowing Growth and Arrival of AI Era of Computing.
Dropbox has announced that it will lay off around 16% of its staff, approximately 500 employees, due to slowing growth and the arrival of the AI era of computing.
The latest job cuts were announced in a memo from CEO Drew Houston and an SEC filing. The filing stated that the company will incur charges of around $37m to $42m in connection with the layoffs, which will be recorded in Q2.
Q1 results, due to be reported on May 4, are expected to be in line with or above expectations. Houston said that while the business is profitable, growth has slowed.
He argued that investments that once provided positive returns are no longer sustainable due to headwinds from the economic downturn and the maturation of existing businesses.
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Houston said the arrival of the AI era of computing had also played a part in the decision to cut jobs. He wrote: “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 announcement comes amid a surge of layoffs in the tech sector, with over 184,000 people laid off in 2023 across almost 620 companies, according to the Layoffs.fyi tracker.
Impacted staff at Dropbox will be notified today and will finish work tomorrow. The layoffs mark the company’s first since January 2021, when 315 employees were laid off due to the COVID-19 pandemic.
Despite the job cuts, Dropbox is expected to invest in new areas to keep pace with the changing industry.