Scale AI is cutting 200 full-time jobs, 14% of its workforce, weeks after Meta’s $14.3 billion investment and hiring of founder Alexandr Wang.
Interim CEO Jason Droege said the company expanded its generative AI efforts "too quickly" and piled on "excessive bureaucracy." He called the cuts a move to make Scale more agile and better aligned with market shifts.
Droege also promised big hires later this year focused on enterprise, public sector, and international divisions. 
Before the layoffs, Scale had about 1,400 employees globally. The company is also ending contracts with 500 contractors. Severance packages are being provided, a spokesperson confirmed.
"We’re streamlining our data business to help us move faster and deliver even better data solutions to our GenAI customers,"
Scale AI spokesperson Joe Osborne told CNBC.
"We also plan to make significant investments and hiring across our enterprise and government AI businesses."
Scale AI, started in 2016, is known for prepping data for OpenAI, Google, and Microsoft’s AI models. But OpenAI is winding down its relationship, and Google is reportedly pulling back after Scale’s deal with Meta, according to Reuters.
Meta tapped Wang as chief AI officer to lead its Meta Superintelligence Labs. Some Scale employees also moved to Meta as part of the deal.
Droege sent a memo to staff Wednesday, thanking those laid off.
"I want to extend our deepest gratitude for their valuable contributions and dedication to our company."
The cuts come amid a broader AI hiring race, with Meta aggressively expanding its AI teams to compete with OpenAI.
Watch on CNBC: What Meta’s Scale AI deal reveals about the battle for top AI talent
