Dropbox blamed the economic downturn on the layoff decision. Its new ambition is to be at the forefront of the AI of computing.
Heaptalk, Jakarta — Cloud storage service provider, Dropbox, announced the termination of employment for 16% of its global workforce, or 500 employees (04/27).
According to Dropbox CEO Drew Houston, this step had to be taken partly due to the economic downturn that originally affected its customers, which then also had an impact on Dropbox itself. Previously, he stated that his business is profitable. However, the growth remains sluggish.
“Part of this is due to the natural maturation of our existing businesses, but more recently, headwinds from the economic downturn have put pressure on our customers and, in turn, on our business. As a result, some investments that used to deliver positive returns are no longer sustainable,” said Houston in an email to all employees.
Besides, he also mentioned that the AI era of computing has contributed to the shift of Dropbox’s business focus onward. Claiming to have initiated product development for a long time, the company is optimistic that AI will give new superpowers. Further, Dropbox plans to launch a new range of products in 2023.
Houston uttered, “In some areas, investments that showed promise before the downturn have more limited potential today. In others, we have not been executing consistently or managing performance as tightly as we need to. So, we have made more significant cuts in these areas in order to free up investment in our future growth.”
Aiming to be at the forefront of the AI era
The impacted employees will receive several benefits and supports, one of which is sixteen weeks of pay with one additional week of pay for each completed year of tenure at the company, and a Q2 equity vest. In addition, they can still access health services for up to six months, keep company devices for personal use, and get job replacement services and career coaching.
Currently, Dropbox is streamlining how the company is organized to adjust to the latest changes, including layoff and business focus shifting, which are believed to be aligned with the principles of sustainable financial growth, efficiency, and flexibility to invest in the future.
“These transitions are never easy, but I am determined to ensure that Dropbox is at the forefront of the AI era, just as we were at the forefront of the shift to mobile and the cloud. We will need all hands on deck as machine intelligence gives us the tools to reimagine our existing businesses and invent new ones,” concluded Houston.
