Dropbox announced layoffs today. Due to sluggish growth and “the AI era of computing has finally arrived,” CEO Drew Houston stated today that the business would lay off 16% of its workers, or 500 individuals.
The company’s last layoffs were 315 in January 2021 during the COVID-19 epidemic. CEO and co-founder Drew Houston informed colleagues of the latest cut in a message and SEC filing.
The SEC filing stated that layoff expenses would total $37 million to $42 million in Q2. In addition, it stated that Q1 results would meet or exceed expectations next Thursday, May 4. Even though Dropbox is profitable and has great results, Houston said the firm is cutting workers and investing in new areas to keep up with change as growth slows.
While profitable, our growth has slowed. Our enterprises have matured, but the economic crisis has strained our clients and business. Thus, some investments that previously yielded positive returns are no longer viable,” he wrote.
“Second, and more importantly, the AI era of computing has arrived,” he said. We’ve always thought AI would give us superpowers and change knowledge work. As this year’s product pipeline shows, we’ve been working toward this future.
This will frighten those who have warned that AI would take more employment. But, on the other hand, the more cynical would say it’s an easy and timely reason for lowering expenses right now to keep the market and investors confident that Dropbox is moving with the times and won’t be disrupted in the next wave of innovation.
Houston said affected personnel will be contacted today and conclude work tomorrow. Today’s transfer affected 3,125 workers.
According to Layoffs. FYI, roughly 620 IT businesses will lay off 184,000 individuals in 2023.