Dropbox Blames AI For Cutting 16% Of Its Workforce

Dropbox says it’s slicing 500 jobs as a result of the corporate desires to know the alternatives offered by AI.

A weblog submit from the corporate’s CEO, Drew Houston, claims the corporate is eager to take advantage of the advantages of AI and that it requires new expertise from its workforce.

“The AI period of computing has lastly arrived,” Houston writes. “We’ve believed for a few years that AI will give us new superpowers and fully rework information work. And we’ve been constructing in direction of this future for a very long time, as this 12 months’s product pipeline will display.”

“The chance in entrance of us is bigger than ever, however so is our have to act with urgency to grab it. Over the previous couple of months, AI has captured the world’s collective creativeness, increasing the potential marketplace for our subsequent technology of AI-powered merchandise extra quickly than any of us might have anticipated. Nevertheless, this momentum has additionally alerted our opponents to lots of the similar alternatives.”

“In a great world, we’d merely shift folks from one workforce to a different. And we’ve achieved that wherever attainable. Nevertheless, our subsequent stage of development requires a special mixture of talent units, notably in AI and early-stage product improvement. We’ve been bringing in nice expertise in these areas during the last couple years and we’ll want much more.”

Financial downturn

The shift in direction of AI isn’t the one purpose Dropbox is shedding workers, in line with Houston. The financial downturn has “put strain on our prospects and, in flip, our enterprise,” the CEO writes.

“Consequently, some investments that used to ship constructive returns are not sustainable,” he says, with out mentioning which investments or merchandise are not delivering passable returns.

Dropbox is because of announce its first quarter outcomes on Might 4. For the 2022 fiscal 12 months, the corporate posted revenues of $2.3bn, up 7.7% 12 months on 12 months, whereas internet earnings was up by greater than $200m to $553.2m.

Settlement phrases

The workers affected will probably be a despatched calendar invite for a one-on-one assembly with a workforce chief right this moment, the place they are going to be given particulars of their redundancy package deal and have a chance to ask questions. These departing will “have a while right this moment and tomorrow to wrap up and say goodbye to colleagues,” suggesting they are going to be out of the corporate by the weekend.

Affected workers members will obtain 16 weeks of pay, with an extra week of pay for every year of service with the corporate. Healthcare will probably be continued for six months, and workers will probably be allowed to maintain company-issued gadgets for private use.

Houston provides that the modifications being made within the firm are “painful” however “mandatory for our future”.

“These transitions are by no means simple, however I’m decided to make sure that Dropbox is on the forefront of the AI period, simply as we had been on the forefront of the shift to cellular and the cloud,” he writes.

“We’ll want all palms on deck as machine intelligence provides us the instruments to reimagine our present companies and invent new ones. And I am dedicated to doing every part in my energy to finest place ourselves for the longer term and unlock our full potential.”