Elon Musk’s startup, xAI, simply minimize down its greatest staff by a 3rd.

The AI startup laid off not less than 500 employees on its 1,500-person information annotation staff on Friday night time, reviews Enterprise Insider. The transfer means the staff, which leads AI coaching, is right down to about 1,000 employees. The group is tasked with refining xAI’s chatbot, Grok, by instructing it learn how to contextualize information.

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The corporate requested the staff’s staff to finish a sequence of checks on Thursday night time that may assist classify them based mostly on their strengths and pursuits. The checks coated areas like coding, finance, and drugs. Greater than 200 staff accomplished the checks, which had a Friday morning deadline, per BI.

On Friday night time, xAI notified some staff on the staff that they have been being laid off through e-mail that mentioned the corporate was on the lookout for extra “specialist AI tutors,” with deep data of disciplines like science, know-how, and finance, and reducing again its employment of “basic AI tutor roles” with out that specialised data. Generalist AI tutors tackle a variety of broader duties, like annotating movies and writing assignments.

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“This strategic pivot will take impact instantly,” the e-mail, which was obtained by BI, learn. “As a part of this shift in focus, we now not want most generalist AI tutor positions, and your employment with xAI will conclude.”

^{xAI CEO Elon Musk. Picture by Chip Somodevilla/Getty Photos}

Employees have been informed that they’d lose entry to firm methods instantly, however that they’d nonetheless be paid their salaries via both the top of their contract or Nov. 30.

Amidst the layoffs, xAI remains to be hiring: The startup lately marketed for open positions for specialist AI tutors. In a put up on X final week, xAI wrote that it was planning to “instantly” develop its specialist staff tenfold and was “hiring throughout domains” like drugs and finance.

Specialist AI tutors at xAI are including large worth. We are going to instantly surge our Specialist AI tutor staff by 10x!

We’re hiring throughout domains like STEM, finance, drugs, security, and plenty of extra. Come be a part of us to assist construct truth-seeking AGI!https://t.co/htpc2RijLG

— xAI (@xai) September 13, 2025

xAI has been quickly rising its information annotation staff. Since February, the startup has added about 700 staff to the group. In accordance with xAI’s web site, compensation for AI tutor roles can vary from $45 to $100 per hour. The corporate had listed 13 open AI tutor positions on the time of writing.

The xAI layoffs observe a number of senior-level departures from the startup, together with the corporate’s former Chief Monetary Officer Mike Liberatore, who left on the finish of July. That very same month, xAI launched Grok 4, its most superior mannequin but, calling it the “most clever mannequin on the earth” with excessive efficiency on benchmark checks.