According to a Friday report by Business Insider, Elon Musk’s xAI has laid off at least 500 employees from its data annotation team, which is instrumental in developing the company’s Grok chatbot.
Citing multiple messages reviewed by Business Insider, the report states that the company informed employees via email on Friday night that it planned to downsize its team of generalist AI tutors.
In response to a request for comment, xAI referred to a post on X (formerly Twitter) where the company stated it was hiring for various roles and planned to increase its specialist AI tutor team by “10X.”
The data annotation team, which is xAI’s largest, teaches Grok to understand the world by contextualizing and categorizing raw data, according to Business Insider.
The report noted that affected employees were told they would be paid through the end of their contract or until November 30, but their access to company systems would be terminated on the day of the layoff notice.
The Wall Street Journal reported this month that xAI’s finance chief, Mike Liberatore, left the company around the end of July after only a few months on the job, citing people familiar with the matter.
Musk launched xAI in 2023 to challenge the AI efforts of major tech companies, accusing industry leaders of excessive censorship and relaxed safety standards.
