Dropbox has become the latest company to announce a job cull of 16% of its workforce.
The cloud storage provider is laying off around 500 employees in the face of what it sees as “slowing growth” amid the rise of artificial intelligence.
In a message to shareholders, CEO Drew Houston outlined reasons for the decision.
“First, while our business is profitable, our growth has been slowing. 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,” the CEO wrote. “As a result, some investments that used to deliver positive returns are no longer sustainable.”
But it was another, more inevitable trend that the CEO cited as having a big effect on the company’s strategy.
“The AI era of computing has finally arrived,” Houston told shareholders.
“(We) need to acknowledge some other hard truths. In some areas, investments that showed promise before the downturn have more limited potential today. In others, we haven’t been executing consistently or managing performance as tightly as we need to. So we’ve made more significant cuts in these areas in order to free up investment in our future growth.”
Shares of Dropbox were down 2.2% at the midway point of trading Thursday.
Contact Angela at angela@proactiveinvestors.com
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