The cloud storage giant Dropbox announced today that it will be laying off approximately 500 workers – around 16% of its global workforce – as its business is growing at a slower pace than it was before and during the pandemic while it is also believing in the ability of artificial intelligence to radically transform its processes.

In a press release published this morning, the Chief Executive Officer of the California-based file hosting service, Drew Houston, said that those affected by the decision will be informed 30 minutes after the communications were published via an invitation to have a 1-on-1 meeting with their bosses.

Houston acknowledged that, even though Dropbox is a profitable business, the company is preparing for any headwinds and financial pressure that could result from an expected global economic slowdown. It is also getting ready to fully embrace AI.

New Suite of AI-Powered Products Could be in the Works at Dropbox

Houston mentioned artificial intelligence as another cause for these forced departures. In this regard, the tech executive asserted that AI could give his company “superpowers”.

Houston also hinted that this year’s product pipeline and releases should make it clear that Dropbox has been getting ready to push AI to take center stage of the company’s value proposition and business model.

Also read: Best Tech Stocks to Buy in April 2023

“The opportunity in front of us is greater than ever, but so is our need to act with urgency to seize it. Over the last few months, AI has captured the world’s collective imagination, expanding the potential market for our next generation of AI-powered products more rapidly than any of us could have anticipated”, he asserted.

Interestingly, there was no mention of artificial intelligence or anything of that nature during the earnings call that accompanied the firm’s Q4 2022 quarterly report. However, in January this year, Dropbox published an interesting blog where it discussed how it was using machine learning to make predictions about the expected revenues that could come from a single customer.

These forecasts are drafted based on an assessment of the customer’s satisfaction with the service during the free trial period. In this scenario, the company uses artificial intelligence to evaluate the effectiveness of different approaches and strategies employed to get customers to pay a subscription and then it can analyze the results after only a few days instead of the 90 days or so that it previously took.

It appears that, even though on the surface, the company is not pushing forward anything related to AI thus far, there may be a lot in the works that could soon be released and presented to the general public based on Houston’s comments today.

Those who are being let go will receive from the company sixteen weeks of pay plus an additional week for every year they worked for Dropbox in addition to six weeks of health care coverage and job placement assistance. All devices that were assigned by the company will also stay with them including smartphones, laptops, and tablets.

Also read: Where to Buy Filecoin – Beginner’s Guide

“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”, Houston added.

Dropbox Will Be Reporting Earnings Next Month

Dropbox expects to spend from $37 to $42 million in restructuring expenses including severance pay to complete these layoffs. These expenditures will be reflected in the financial results covering the second quarter of 2023.

The company is planning publish its quarterly earnings covering the first quarter of the year on 4 May. According to data from Seeking Alpha, earnings per share are expected to land at $0.36 per share while revenues have been estimated to end the quarter at around $601 million.

Other Related Articles: