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The world’s largest provider of cloud storage, Dropbox, today announced layoffs. Due to sluggish growth and the fact that “the AI era of computing has finally arrived,” according to CEO Drew Houston, the firm today announced it will be letting go of 16% of its workforce, or around 500 people. These seem to be the company’s first layoffs since January 2021, when it let go of 315 workers during the COVID-19 outbreak. In addition to an SEC filing, CEO and co-founder Drew Houston informed the workforce of the most recent cull in a memo.

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According to the SEC filing, the business would face layoff-related expenses of between $37 million and $42 million, which will be reported in Q2. Results for the first quarter will be comparable to or perhaps beyond expectations when they are released on Thursday, May 4. Ironically, Houston said the firm is opting to take a preventive action to reduce employment and invest in new areas to stay up with the rate of change given that growth is decreasing, despite the positive outcomes and the fact that Dropbox is profitable.

This will be a worrying development for those who have been warning that AI would unavoidably result in the loss of more employment. The more cynical may counter that it’s a quick and convenient justification for cost reductions right now, to maintain investor and market confidence that Dropbox is adapting to the times and won’t be disrupted by the next wave of innovation.

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According to Houston, affected employees will be contacted today and their job will be completed by tomorrow. The firm had 3,125 workers before the relocation took place today. In accordance with the Layoffs.fyi tracker, approximately 620 technological companies have let off more than 184,000 workers in 2023.

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