Dropbox rejoices in the advent of the artificial intelligence era and fires 500 people
Dropbox has announced that it will send 16% of its workforce home to focus efforts and investments in artificial intelligence. But in the tech sector it is only the latest in chronological order, in fact it is estimated that in 2023 more than 184,000 people were fired from around 620 companies. All the details
Like many Big Techs , Dropbox, the Californian cloud storage giant, has also announced the cut of 16% of its workforce, or about 500 people. According to Techcrunch , these would be the company's first layoffs since January 2021, when 315 employees lost their jobs following the pandemic.
The CEO, Drew Houston, justified the decision by citing a "slowdown in growth" but also added that "the era of artificial intelligence has finally arrived".
NOTE FROM THE CEO
In a note published on the Dropbox website, the company's CEO took full responsibility for the layoffs explaining that "first of all, although our business is profitable, growth has slowed down, in part due to the natural maturation of our existing businesses, but more recently the headwinds of the economic crisis have put our customers and, consequently, our business under pressure.”
Houston then goes on to say that “secondly, and most importantly, the age of artificial intelligence has finally arrived”. “For many years – explains the CEO – we believed that AI would give us new superpowers and would completely transform knowledge work. And we've been building this future for a long time, as evidenced by this year's product pipeline."
“The opportunity before us is greater than ever, but so is the need to act urgently to seize it,” Houston says the company needs to stay ahead of its competitors.
AI WRAPS PERSONNEL
Although AI also requires someone's work, the CEO reported that employees who could be redeployed have been moved to other teams, however the next phase of growth will require "a different mix of skills", for which others will be hired “great talents”.
LAYOUTS DESPITE GOOD RESULTS
The SEC filing disclosing the layoffs says Dropbox will incur approximately $37-42 million in expenses related to the layoffs, which will be recorded in the second quarter, while first-quarter results, to be disclosed on May 4 , will be in line or even higher than expected.
Therefore, despite the good results, the decision to cut personnel is a preventive move to be able to invest in new, more profitable areas, such as AI, and on which all Big Techs are focusing.
Impacted employees will receive free job placement and career coaching services, as well as up to 16 weeks of severance pay and one additional week for each year they stay with the company, according to Dropbox.
CUTS IN THE TECH SECTOR
According to the Layoffs.fyi tracker cited by Techcrunch , more than 184,000 people in the tech sector were laid off from around 620 companies in 2023 alone.
“These transitions are never easy,” Houston said.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/dropbox-gioisce-per-lavvento-dellera-intelligenza-artificiale-e-licenzia-500-persone/ on Fri, 28 Apr 2023 13:42:59 +0000.