Dropbox on Thursday revealed plans to fire 500 employees, around 16 per cent of its workforce, according to a blog post on the business’ website.

In the blog post, Dropbox CEO Drew Houston said that the company has been planning for slowing growth, in part due to the maturation of its business but also due to the demands on its customers’ finances.

Mr Houston said that the company is under pressure to focus more on products using artificial intelligence, which will need the hiring of staff with a variety of skill sets.

“In an ideal world, we’d simply shift people from one team to another,” Mr Houston wrote. “And we’ve done that wherever possible. However, our next stage of growth requires a different mix of skill sets, particularly in AI and early-stage product development. We’ve been bringing in great talent in these areas over the last couple years and we’ll need even more,” Mr Huston added.

“These transitions are never 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,” said Mr Huston in the blogpost.

The blog post stated that affected staff members will get free career counseling and help finding jobs, as well as up to 16 weeks of severance pay and an extra week for each year they worked for Dropbox.

The company is merging its Core and Document Workflows divisions, among other internal team restructurings, and Mr Houston noted that the layoffs are a part of a larger company consolidation. Dropbox intends to hold internal town halls the following week and tomorrow to address employee inquiries.