Nearly a month after Meta invested $14.3 billion in Scale AI for a 49 per cent stake, the latter seems to have let go of a large part of its workforce. The company, which is known to be a training data provider for AI companies, has reportedly fired 14 per cent of its workforce, which is about 200 employees along with 500 global contractors.
Scale AI, through its spokesperson Joe Osborne, has attributed the layoffs to streamlining efforts of its AI operations. According to interim CEO Jason Droege, the layoffs were an outcome of the company onboarding too many people too quickly which resulted in “too many layers, excessive bureaucracy, and unhelpful confusion about the team’s mission.” However, reports also said that the company has plans to hire in other areas which include enterprise, government sales.
The CEO reportedly said that the ‘shifts in market demand’ also contributed to the decision to restructure. Scale AI, founded in 2016, has been one of the known names when it came to helping tech companies label and annotate data that is critical to building AI models. The company was founded by Alexandr Wang and Lucy Gao.
On July 15, it was reported that Facebook parent Meta has invested in Scale AI in a deal worth $29 billion, onboarding its CEO Alexandr Wang to play a key role in the company’s AI strategy. Wang is all set to lead Meta’s new superintelligence unit that is Meta’s multibillion project to catch up on AI development.
Meta will reportedly take a 49 per cent stake for $14.3 billion.“We will deepen the work we do together producing data for AI models and Alexandr Wang will join Meta to work on our superintelligence efforts,” Meta said in a statement that did not disclose financial terms.
Even though Scale AI has been a leading company that offers data labelling services for big tech-backed AI projects, it has been facing intense competition from players like Invisible Technologies, Labelbox, Turing, and Uber Technologies Inc., etc.
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