Elon Musk’s artificial intelligence company, xAI, has laid off over 500 employees from its data annotation team, according to Business Insider.
The decision was communicated via late-night emails on Friday, September 12, marking one of the company’s largest workforce cuts to date.
The layoffs primarily affected generalist AI tutors, as the company pivots toward building a bigger team of specialist AI tutors.
Strategic pivot: Focus on specialists
In the layoff email, xAI explained its new strategy.
“After a thorough review of our Human Data efforts, we’ve decided to accelerate the expansion and prioritization of our specialist AI tutors, while scaling back our focus on general AI tutor roles,” the email said.
The data annotation team, previously xAI’s largest, has been critical to the development of Grok, the company’s AI chatbot, by teaching it to contextualise and categorise raw data.
Following the layoffs, the team size has dropped from more than 1,500 members to just over 1,000.
Hiring spree: 10X expansion in specialist roles
Despite the downsizing, xAI announced on X (formerly Twitter) that it plans to expand its specialist AI tutor team by “10X.” The company is now hiring across a range of fields, including STEM, finance, medicine, and AI safety.
This hiring push comes shortly after several senior executives were let go, signaling a broader restructuring within the company.
In the days following the layoffs, xAI conducted internal tests to evaluate remaining annotators and supervisors, sorting them by strengths and interests in domains such as STEM, coding, finance, medicine, and Grok’s “personality and model behavior.”
The company has indicated that this reorganisation will determine the roles of remaining employees moving forward.
