Dropbox is laying off around 500 employees, making up about 16 percent of the company’s entire workforce. In a memo to employees, Dropbox CEO Drew Houston attributes the layoffs to a rocky economy — but also says that the cuts will allow the company to build out its AI division.

“In an ideal world, we’d simply shift people from one team to another. And we’ve done that wherever possible,” Houston writes. “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.”

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