Elon Musk’s artificial intelligence company, xAI, has laid off at least 500 employees from its data annotation team, a group crucial to developing the company’s Grok chatbot. According to a report from Business Insider, the workers were notified of the layoffs via email on Friday night. The notification stated that the company was downsizing its team of generalist AI tutors, who are responsible for teaching Grok to understand and contextualize raw data, a fundamental process in AI training.
In response to the layoffs, xAI directed attention to a post on the social media platform X, stating that it is actively hiring across various domains and plans to grow its team of specialist AI tutors by “10X.” This suggests a strategic pivot from employing a large number of generalists to focusing on a smaller, more specialized workforce. The affected employees were informed they would receive pay through the end of their contract or until November 30, but their access to company systems was terminated immediately upon notification.
The news follows recent reports of instability within the company’s leadership. The Wall Street Journal reported earlier this month that xAI’s chief financial officer, Mike Liberatore, left the company around the end of July after holding the position for only a few months. This executive departure, coupled with the mass layoffs, points to potential internal restructuring as the startup navigates the competitive AI landscape.
xAI was launched by Elon Musk in 2023 as a challenger to Big Tech’s dominance in artificial intelligence, with Musk criticizing industry leaders for what he described as excessive censorship and lax safety standards. The latest move to cut a significant portion of its largest team indicates a rapid evolution in the company’s strategy as it seeks to compete with established AI giants.
