Scale AI Cuts 14% of Workforce After Meta Acquisition Deal
Scale AI is laying off 200 employees and dropping 500 contractors as it shrinks its core data-labeling operations. The company now plans to focus on its enterprise and government sales divisions.
Scale AI is laying off 200 employees, which represents roughly 14% of its staff, and is cutting ties with 500 global contractors. The workforce reduction impacts the startup's core data-labeling business, where it supplies AI labs with structured data to train machine learning models.
Interim CEO Jason Droege explains in a company memo that Scale AI scales its data-labeling operations too quickly. Following Meta's recent $14.3 billion deal to hire Scale AI's CEO, several of the startup's largest data customers sever their ties with the company.
Like other AI startups that experience reverse acqui-hires, Scale AI pivots away from the specific business that originally establishes its reputation. Moving forward, the company plans to hire new staff to build out its enterprise and government sales units.