xAI, the artificial intelligence (AI) startup founded by Elon Musk, has carried out a large-scale layoff equal to one-third of its workforce.
U.S. business outlet Business Insider reported on the 13th (local time) that xAI notified 500 employees of layoffs. Those affected are primarily the data annotation team that supports development of the chatbot "Grok," tasked with contextualizing and classifying raw data to help AI understand the world. This team has been regarded as the largest organization within xAI.
The company said it will pay the laid-off employees through their contract end date or until Nov. 30, but that their access to company systems would be cut off from the time of notification. With this measure affecting 500 of the total 1,500 employees, xAI said it will fully embark on a strategic shift.
xAI said it is announcing an immediate "strategic shift," reducing investment in the role of general AI teachers and accelerating the expansion of "specialized AI teachers" with specific expertise such as law and medicine.
It added that "most general AI teacher roles are no longer needed," and that it will reduce those positions while strengthening hiring for specialized roles. The company plans to expand the specialized AI teacher team tenfold compared with the existing workforce and said it is hiring across a range of fields including STEM (science, technology, engineering and mathematics), finance, medicine and safety.
The restructuring draws attention alongside recent departures from the leadership team. At the end of Jul., Chief Financial Officer (CFO) Mike Liberatore left the company just three months after taking the post, and co-founder Igor Babuschkin also resigned on 13th. On 7th of the same month, Robert Keel, who led legal, left after just over a year at the company, and senior attorney Raghu Rao, who handled transaction-related legal matters, also resigned that month, according to reports. The reasons behind their departures have not been specified.
Musk founded xAI in 2023, saying he would rein in the dominance of existing tech giants in AI development. However, with successive job cuts and leadership departures, analysts say uncertainty is growing over the company's future direction.