Dropbox, the file-hosting service headquartered in San Francisco, has announced its plan to lay off 500 employees, which represents about 16% of its workforce. In a statement released on Thursday, Drew Houston, the company’s co-founder and CEO, revealed that the decision was driven by two factors.
The first reason cited by Houston was the economic downturn that has placed pressure on the company’s customers, causing some previously profitable investments to become unsustainable. Secondly, Houston acknowledged the rapid growth of artificial intelligence technology, which has necessitated the need for different skill sets, particularly in the areas of AI and early-stage product development.
Houston said that impacted employees would be eligible for 16 weeks of pay, and those affected could continue their healthcare coverage through COBRA for six months. Additionally, they would be allowed to keep their company devices for personal use, and career placement and job coaching services would be available to them at no cost.
The layoffs come amidst a wave of tech company layoffs this month. Major firms such as Amazon, Rapid, Anthemis Group, Lyft, Meta, Redfin, and Apple have all announced cuts to their workforce.
Houston stated that he would be hosting regional town halls to answer questions and provide further details on future plans. Despite the pain caused by the layoffs, he emphasized that they were necessary for the company’s future growth. Houston added that change is constant in the business world, and companies that embrace new realities and take decisive action usually fare better than those that hold onto the past or try to have it all.