Cloud file hosting service provider Dropbox announced plans to lay off 500 employees, representing 16% of its workforce.

 

Cloud file hosting service provider Dropbox announced plans to lay off 500 employees, representing 16% of its workforce.   An internal memo cites slowing revenue growth and a shift in company strategy to focus on AI as the factors behind the job cuts.  Dropbox CEO Drew Houston emphasized that the company is looking to capitalize on the AI boom by equipping its cloud platform with AI capabilities, which entails an adjustment of the company’s development teams.  Houston also highlighted that “headwinds from the economic downturn have put pressure on our customers and, in turn, our business.”  The San Francisco-based company plans to onboard new talent in AI and early-stage product development to drive its next stage of growth.  Affected employees will receive 16 weeks of severance pay and an additional week of pay for every year they worked at the company.  Dropbox is expected to incur $37M to $42M in expenses due to the layoffs.