Scale AI Cuts Hundreds Of Jobs Weeks After Meta’s $14 Billion Bet—Here's What We Know So Far

The layoffs, announced as part of a broader company restructuring, have primarily affected the Generative AI (GenAI) unit. This team has been instrumental in supporting high-profile chatbot projects

Employees who were let go will receive their regular pay through September 15 and may be eligible for additional severance

Source : FreePik

Artificial intelligence startup Scale AI has slashed its workforce shortly after securing a massive $14 billion investment from tech giant Meta. The company laid off approximately 200 full-time employees—roughly 14 per cent of its permanent staff—as well as 500 contractors. The layoffs have triggered widespread speculation about internal challenges, particularly given the scale and timing of recent funding.

The layoffs, announced as part of a broader company restructuring, have primarily affected the Generative AI (GenAI) unit. This team has been instrumental in supporting high-profile chatbot projects such as Elon Musk’s xAI-powered Grok and Google’s Gemini. Interim CEO Jason Droege communicated the decision to staff via email, according to details obtained by Business Insider.

Layoffs Executed Abruptly

What has alarmed observers and employees alike is how the layoffs were carried out. Multiple reports indicate that affected workers were abruptly cut off from internal systems, including Slack, before they even began their day. Employees who were let go will receive their regular pay through September 15 and may be eligible for additional severance packages if they accept the terms offered by the company, claims the report.

Leadership Shifts Add To Uncertainty

Adding to the speculation, former CEO and company founder Alexandr Wang recently joined Meta to lead its Superintelligence division. His departure, along with reports of other senior executives and researchers exiting, has deepened questions about the company’s direction. Meanwhile, key clients, such as Google, are reportedly scaling back their collaborations, according to the report.

Financial Health Vs Operational Challenges

Despite these turbulent changes, Scale AI maintains that it remains financially sound and is actively hiring in other divisions. However, scrutiny over the company’s handling of sensitive training data, as reported by Business Insider, adds another layer of concern.