Cloud storage company Dropbox plans to lay off around 500 employees.

The company said that it was cutting 16 percent of its workforce due to global economic uncertainty and the "AI era of computing."

"Our business is profitable, [but] our growth has been slowing," CEO Drew Houston said.

"Part of this is due to the natural maturation of our existing businesses, but more recently, headwinds from the economic downturn have put pressure on our customers and, in turn, on our business. As a result, some investments that used to deliver positive returns are no longer sustainable."

Alongside the economic challenges, Houston blamed his decision on his belief that "the AI era of computing has finally arrived."

He added: "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. However, this momentum has also alerted our competitors to many of the same opportunities."

This will require workers with a different skill set, "particularly in AI and early-stage product development," he said. "We’ve been bringing in great talent in these areas over the last couple of years and we'll need even more."

Laid-off employees will be eligible for sixteen weeks of pay, with one additional week of pay for each completed year at Dropbox. They are also eligible for up to six months of COBRA in the US, and equivalents overseas.

Dropbox operates its own data center infrastructure, rather than using public cloud services.