Elon Musk’s AI startup xAI reportedly cut at least 500 people from its data-annotation ranks on Friday night. The company informed its staff by email that the company is shrinking its group of generalist AI tutors and shifting resources to specialists.
The internal note, reviewed by Business Insider said “After a thorough review of our Human Data efforts, we’ve decided to accelerate the expansion and prioritization of our specialist AI tutors, while scaling back our focus on general AI tutor roles. This strategic pivot will take effect immediately.
As part of this shift in focus, we no longer need most generalist AI tutor positions and your employment with xAI will conclude.”
Employees were told they would continue to be paid through the end of their contract or through November 30. However their access to company systems would end the same day they received the notice.
xAI Slack channel shrinks by 500
Annotators make up xAI’s largest unit and help train Grok by labeling and organizing raw information so the chatbot can read context and meaning.
The main Slack channel for these workers had more than 1,500 members on Friday afternoon. By Friday evening, that count had dropped to a little over 1,000 and kept falling as the reporting continued.
Later Friday, xAI posted on X that it is hiring and plans to expand its cohort of specialist AI tutors by “10X.”
The layoff emails arrived only days after several senior staffers, including the former head of the annotation team, saw their Slack access cut.
In the following days, employees were called into one-on-one meetings to walk through duties, recent work, and accomplishments, nine workers told. They were also asked to flag colleagues whose efforts they wanted to recognize.
xAI new team leader demanded overnight tests
By Thursday night, xAI told the annotation group to brace for a reorganization. A team-wide message asked some employees to halt other work and complete a set of tests meant to help define their positions going forward, with a deadline of Friday morning Pacific time.
A screenshot said the tests would sort annotators and their supervisors by strengths and interests.
The testing notice was posted by Diego Pasini, whom ten workers said had recently taken charge of the team. Pasini asked staff to finish at least one test by the next morning.
The topics covered standard fields such as STEM, coding, finance, and medicine, as well as more idiosyncratic areas tied to Grok’s behavior, including “personality and model behavior” and “shitposters and doomscrollers.”
The company also listed assessments for safety work, including “red teaming” the bot, and for tasks involving audio and video.
According to his LinkedIn profile, Pasini joined xAI in January and is “on leave” from undergraduate studies at the Wharton School of the University of Pennsylvania. Pasini and an xAI representative did not immediately respond to a request for comment.
Hundreds of xAI employees confused by sudden testing orders
The Thursday announcement said the tests targeted supervisors and generalist tutors. xAI organizes staff into specialty tracks for STEM, coding, finance, legal, and media, alongside a large pool of generalists who handle many kinds of assignments, from writing to labeling audio and video.
More than 200 employees reacted to Pasini’s post with a green check-mark emoji, and over 100 replied with questions or comments.
One worker, frustrated by the tight turnaround, wrote “Doing this after people have gone home for the day is pretty shady,” a message shown in a screenshot. Multiple employees said that worker’s Slack account was deactivated shortly afterward.
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