Scale AI Trims 14% of Staff Weeks After Massive Meta Investment
Scale AI cuts 200 full-time employees and hundreds of contractors as it looks to streamline operations following a major Meta investment and the departure of its founder.
Scale AI cuts 200 full-time employees, representing 14% of its global workforce, just weeks after Meta invests $14.3 billion into the startup and hires its founder, Alexandr Wang. Interim CEO Jason Droege explains in a company memo that the artificial intelligence firm expands its generative AI capacity too quickly, leading to excessive bureaucracy and the need for a more streamlined structure.
The layoffs come as major tech partners distance themselves from the data-labeling company. OpenAI gradually winds down its work with Scale AI over the past year, and Google reportedly cuts ties following the company's new deal with Meta. Prior to these job cuts, Scale AI employs 1,400 people globally and also ends contracts with 500 external contractors.
Despite the reductions, Scale AI remains a well-funded company that plans to significantly increase headcount in the second half of the year. The startup shifts its focus toward its application business units, specifically targeting enterprise, public sector, and international public sector divisions to better serve existing customers and win back those who slow down their business.