Following a reduction in headcount of around 15% earlier this year in response to the lasting effects of the pandemic on the economy, cloud storage giatn Dropbox has announced a second round of layoffs impacting even more workers.
The company announced the departure of 500 workers, accounting for around 16% of its already reduced headcount, and it’s blaming AI.
Company CEO Drew Houston first shared the news with employees in a company-wide email, promising individual meetings for affected workers with their team leader and an HR representative to discuss departure.
Dropbox lays off more workers because of AI
Contrary to fears that have been growing in recent months, during what Dropbox’s Houston calls “the AI era,” artificial intelligence hasn’t replaced the jobs of tech workers according to the company.
Rather, AI development has meant that the company has needed to acquire new talent whose skill sets more closely match its up and coming products. Houston explained that workers have already shifted to other departments “wherever possible.”
Affected workers’ severance packages will include 16 weeks’ pay plus an additional week for each year worked at the company, up to six months of COBRA healthcare in the US and similar equivalents in other regions, and support for career transitions. Company-provided hardware, like business laptops and business smartphones, will also remain in the hands of departing workers.
Describing the layoffs as “painful,” Houston believes that the changes are necessary for the platform to lead from the front as other companies begin to ramp up their AI operations.
With tech layoffs slowing down recently, it’s unclear whether a new bloom of AI-related layoffs will emerge and how this will affect employment moving forward.
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