Dropbox Inc., a supplier of cloud storage, announced on Thursday that it would downsize its global headcount by 16% in an effort to minimize expenses in the face of sluggish cloud growth and instead attract fresh talent to develop its AI offerings.

Based in San Francisco, California Dropbox is the most recent digital business to use AI, as Microsoft Corp. and Facebook-parent Meta Platforms Inc. compete for market share with new products and services.

Drew Houston, the chief executive officer of Dropbox, stated that the company’s core cloud business development was slowing due to the strain the recession was putting on customers, which made some of its profitable initiatives unsustainable.

By the end of 2022, the business employed 3,118 full-time personnel, of whom 2,583 were based in the US.

In order to focus on its AI initiatives, the business claimed it has moved some personnel from one team to another. However, it added that it would still require more talent with a diverse range of skill sets, especially in the fields of AI and early-stage product development.

Houston wrote in a memo to the employees, “We’ve been bringing in great talent in these areas over the last couple of years and we’ll need even more.”

“The computer era of AI has at last arrived… The opportunity before us is bigger than ever, but we also need to move quickly to take advantage of it.

Additionally, Houston serves on the board of Meta Platforms, which claimed on Wednesday that AI was assisting it in increasing traffic to Facebook and Instagram and generating more revenue from ad sales.