Dropbox has announced the reduction of its global workforce by 16%. That is a layoff exercise impacting about 500 employees.
Dropbox CEO Drew Houston confirmed this on his twitter page today where he tweeted, “Shared the difficult decision to reduce our workforce with the Dropbox team today. We’re committed to supporting those affected, and I’m deeply grateful for their contributions.”
Explaining the reasons for the layoffs, Houston said in a statement, “headwinds from the economic downturn” have put pressure on customers and in turn on the business.
He however mentioned as “more consequentially,” the arrival of the AI era which has been believed for many years that it will give the company “new superpowers” and the need to act with urgency and seize the opportunity.
Houston pointed out that it is no longer possible to simply shift people from one team to another as the next stage of growth for the company requires a different mix of skill sets, particularly in AI and early-stage product development. The company therefore will be bringing in more great talents in those areas.
He also emphasized that the change is necessary for the future of Dropbox being at the forefront of the AI era.
“The changes we’re announcing today, while painful, are necessary for our future. These transitions are not easy, but I’m 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’ll need all hands on deck as machine intelligence gives us the tools to reimagine our existing businesses and invent new ones.” he wrote.
The benefits and supports offered to the exiting Dropboxers include;
- Sixteen weeks of pay with one additional week of pay for each completed year of tenure at Dropbox as well as Q2 equity vest
- Six months of COBRA in the US and similar equivalents where applicable
- Modern health support
- Impacted employees get to keep company devices for personal use. These include phones, tablets, laptops and peripherals
- Job placement and career coaching at no cost
Houston says the company plans to host regional Town halls, beginning tomorrow through early next week to answer employees’ questions and to discuss future plans in detail.