Weeks after Meta’s $14.3 billion investment in Scale AI and its hiring of founder Alexandr Wang, the artificial intelligence startup announced it is cutting 200 full-time positions—about 14% of its workforce.
Jason Droege, Scale AI’s interim CEO who succeeded Wang, told employees in a memo on Wednesday that the company had expanded its generative AI capacity “too quickly” and developed too many layers of “excessive bureaucracy.” He emphasized that Scale AI remains well-funded and well-resourced.
“These changes will make us more nimble — enabling us to react more quickly to shifts in the market and customer needs,” Droege wrote in the memo viewed by CNBC. “This structure will allow us to better serve the customers we have today and win back customers that have slowed down work with us.”
Droege added that Scale AI plans to “significantly increase headcount” in the second half of the year across its application business units, including enterprise, public sector, and international public sector divisions.
Bloomberg first reported the layoffs, which Scale AI later confirmed to CNBC.
Founded in 2016, Scale AI is known for helping tech giants like OpenAI, Google, and Microsoft prepare data to train advanced AI models. Over the past year, OpenAI has reduced its collaboration with Scale AI, and Google reportedly plans to cut ties following Scale AI’s deal with Meta, according to Reuters.
Before the cuts, Scale AI employed about 1,400 people globally. Spokesperson Joe Osborne said affected employees received severance, and the company is also ending contracts with 500 out of thousands of contractors worldwide.
“We’re streamlining our data business to help us move faster and deliver even better data solutions to our GenAI customers,” Osborne told CNBC. “We also plan to make significant investments and hiring across our enterprise and government AI businesses.”
Meta has been aggressively hiring in AI to better compete with rivals like OpenAI. Meta CEO Mark Zuckerberg appointed Wang as Meta’s chief AI officer, leading its Meta Superintelligence Labs. Some Scale AI employees have also transitioned to Meta.
In his memo, Droege expressed appreciation for departing employees: “I want to extend our deepest gratitude for their valuable contributions and dedication to our company.”
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