In recent years, there have been numerous factors which have adversely affected the global economy. There are not many sectors which haven’t been negatively impacted by the virus. The disruption of supply chains, lockdowns and other burden associated with the pandemic led to a reduction in demand of leisure activities and non-essential products. Consequently, several small businesses have shut down and major companies have been forced to take steps to cut down costs. Several multinational corporations also faced massive challenges due to the pandemic and were forced to take steps to make their logistics viable.
However, there was one particular industry that has seen massive growth in the last few years including the pandemic duration. There were other challenges faced by the companies in this sector but none of them was enough to send them into losses like other businesses. The cloud storage business has thrived in the last few years and the pandemic could not stop its growth. Other major organizations had to lay off thousands of their employees to stay in business but those in the cloud storage industry were not afraid of the layoffs. The reason for this was the very clear growth of the industry and rising profits even in difficult time. However, as surprising as it might sound a major cloud storage service, Dropbox has announced a 16% cut in their workforce.
Credits: Popular Science
Why!!?
The company has explained that the move is part of a broader strategy to focus more on AI-powered products and hiring new talent. In an official statement, a spokesperson from Dropbox said that they plan to invest in new areas of growth like machine learning, AI, and data science. The advancement of these technologies is expected to enhance the company’s existing products and services. The budget that is saved up might also be put to use to develop new solutions that can help the cloud storage service provider to stand out among its competitors. The company’s CEO cited that although the company was gaining hefty profits, their growth rate had effectively reduced due to the affect of recent economic situations on their customer’s financial well being. Therefore, they had to take this move to get their business back on track.
Bad news for employees?
Although the move will lead to a lot of Dropbox employees being jobless, the company assured that it would help the people effected with multiple perks that would help them sustain before they could find a new job. The cloud storage company has stated that it will provide generous severance package for the employees who will be affected. They have also promised help in finding new employment opportunities. Dropbox has not yet disclosed the exact number of employees who would be affected but if the company stands up to its promises then it might not turn out to be that bad for these people.
What will they use their funds on?
While the company has announced that they’re cutting their team short, Dropbox will also be adding onto their team with new talent with expertise in AI and related fields. The company hopes that this investment in new talent will help it to achieve its goal of becoming a market leader in their field.
In recent years, Dropbox has heavily invested in the field of Artificial Intelligence. The company has also spent significant funds from their budget on acquiring companies which work in AI. Dropbox has also been working on machine learning algorithms to improve the functionality of some of their products including Dropbox Paper and Dropbox Spaces.
Why invest in AI?
There are numerous benefits for the company to invest in artificial intelligence technology:
- Artificial Intelligence could help Dropbox to provide a more unique and personalized experience to their users. This would make them a one of a kind service in an otherwise competitive market.
- The company might also introduce AI-powered collaboration tools that can help teams work together in a more efficient manner.
- Apart from the introduction of new features, the company could also use AI to develop the already existing features of the platform.
Conclusion:
Although it might be upsetting for the people who lose their jobs and their families, it is important to understand that the move will have a positive impact on the growth of the company. As long as Dropbox does not fail to provide the severance pay and assistance in finding employment, there should not be a problem. The move only serves as a means to replace old workforce and introduce people specializing in relevant fields. The talents of the newer workforce could transform the platform into a more usable and helpful tool for the entire world.
