Scale AI Cuts 14% of Workforce After Meta Investment, Hiring of Founder Wang.

Scale AI is cutting 14% of its workforce, or 200 full-time employees, after a $14.3 billion investment from Meta and the hiring of founder Alexandr Wang. Interim CEO Jason Droege said the company had ramped up its generative AI capacity too quickly and created excessive bureaucracy. Scale AI plans to significantly increase headcount across its application business units in the second half of the year.

Scale AI, a prominent AI data labeling company, has announced significant layoffs, impacting approximately 200 full-time employees, representing a 14% reduction in its workforce. The move comes just one month after Meta invested $14.3 billion in the company and hired its former CEO, Alexandr Wang, to lead Meta's new Superintelligence group [1].

The layoffs are part of a broader restructuring effort, as Scale AI aims to streamline its data business and focus on more impactful projects. Interim CEO Jason Droege cited excessive bureaucracy and inefficiencies resulting from rapid expansion in the company's generative AI capacity as reasons for the restructuring [2].

Scale AI's interim CEO, Jason Droege, sent an email to all employees outlining the changes, stating that the company will reorganize its generative AI business into five impactful pods and its go-to-market team into a single demand generation team [2]. The restructuring is aimed at adapting to market shifts, serving existing customers, and winning back clients who have slowed down their work with Scale AI.

Despite the layoffs, Scale AI remains well-funded and committed to growth. The company plans to significantly increase headcount across its application business units in the second half of 2025 [2]. The layoffs will not affect employees' compensation; those impacted will receive severance pay through September 15, with an additional four weeks of pay if they sign the company's severance agreement [1].

The news comes amidst a major shake-up in the AI industry, with mergers, acquisitions, and defections from one startup to another. The Meta investment has also raised questions about Scale AI's long-term sustainability, with some of its biggest clients like Google halting projects in the wake of the deal [1].

References:
[1] https://finance.yahoo.com/news/scale-ai-just-laid-off-160354600.html
[2] https://www.theverge.com/news/708377/scale-ai-layoffs-14-percent