Cloud storage provider Dropbox Inc. said Thursday it would reduce its global workforce by 16% to cut costs amid slowing cloud growth, and instead hire new talent to build its AI offerings.

San Francisco, California-based Dropbox is the latest tech company to tap AI as Big Tech players from Microsoft Corp. to Facebook-parent Meta Platforms Inc. battle for a slice of the fast-growing market with new products and offerings.

Dropbox's chief executive officer, Drew Houston, said the company's core cloud business growth was slowing as challenges from the economic downturn put pressure on customers, making some of its profitable investments no longer sustainable.

At the end of 2022, the company had 3,118 full-time employees, of which 2,583 were located in the United States.

The company said it had shifted some employees from one team to another to focus on its AI projects, but would need more talent with 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," Houston said in a memo to staff.

"The AI era of computing has finally arrived ... The opportunity in front of us is greater than ever, but so is our need to act with urgency to seize it."

Houston is also on the board of Meta Platforms, which said on Wednesday AI was helping it boost traffic to Facebook and Instagram and earn more in ad sales.