Elon Musk's xAI lays off 500 data annotators amid Grok chatbot shake-up

Elon Musk's xAI lays off at least 500 data annotators, the largest team working on its Grok chatbot, as the company shifts focus to specialist AI tutors and reorganises roles

Elon Musk’s AI company, xAI, has laid off at least 500 employees from its data annotation team, which plays a central role in developing the Grok chatbot, Business Insider reported.

 

Multiple emails viewed by Business Insider showed that xAI notified employees of plans to downsize its team of generalist AI tutors.

 

"After a thorough review of our Human Data efforts, we've decided to accelerate the expansion and prioritisation of our specialist AI tutors, while scaling back our focus on general AI tutor roles. This strategic pivot will take effect immediately," the email read. "As part of this shift in focus, we no longer need most generalist AI tutor positions and your employment with xAI will conclude."

 

Workers were told they would be paid through the end of their contract or November 30, but access to company systems would end on the day they received the layoff notice.   

 

Largest team at xAI severely impacted

 

The data annotation team, xAI’s largest, helps teach Grok to understand the world by contextualising and categorising raw data.

 

Screenshots viewed by Business Insider showed that a main Slack room used by annotators dropped from over 1,500 members on Friday afternoon to just over 1,000, with numbers continuing to decline as layoffs progressed.

 

Despite the layoffs, xAI posted on X Friday night that it is hiring and plans to expand its specialist AI tutor team by "10X".

 

Reorganisation comes after senior staff exits

 

The layoff notices came just days after several senior-level employees, including the team’s former head, had their Slack accounts deactivated.

 

In the following days, employees were called into one-on-one meetings to review responsibilities, projects, and achievements. They were also asked to highlight coworkers who had performed well, according to nine workers who spoke with Business Insider.   

 

Tests determine future roles

 

On Thursday night, xAI told employees to prepare for a reorganisation. The company asked staff to complete tests by Friday morning (West Coast time), which would determine their roles going forward.

 

The tests, assigned by Diego Pasini, recently named the team leader, covered traditional subjects like STEM, coding, finance, and medicine, as well as unique specialties including Grok’s "personality and model behaviour" and "shitposters and doomscrollers".

 

Some tests focused on improving chatbot safety, "red teaming" Grok, and working with audio and video content. Pasini joined xAI in January and is “on leave” from the Wharton School of Business at the University of Pennsylvania, according to his LinkedIn profile.

 

The tests were aimed at both supervisors and generalist tutors. Teams at xAI are divided into STEM, coding, finance, legal, and media specialties, alongside generalist tutors handling diverse assignments.