Dropbox CEO Drew Houston announced a round of layoffs, blaming slowing growth and artificial intelligence.

In a message to employees, Houston made it clear that the company “is stable and profitable.” He broke the decision to lay off 16% of the company’s workforce for two main reasons:

First, while our business is profitable, our growth has been slowing. 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.

Second, and more consequentially, the AI era of computing has finally arrived. We’ve believed for many years that AI will give us new superpowers and completely transform knowledge work. And we’ve been building towards this future for a long time, as this year’s product pipeline will demonstrate.

Houston goes on to say that, when it comes to AI, the company needs “to act with urgency to seize it,” while also acknowledging that other investments the company has made have limited future potential.

In the meantime, Houston assured employees that everyone impacted by the layoffs would receive an invite to a 1:1 meeting with their team leader within 30 minutes. The company is offering 16 weeks of severance pay, giving employees the option of keeping their company devices for personal use, offering job placement services, and more.