Scale AI is cutting 14% of its workforce — about 200 employees — just one month after Meta’s multibillion-dollar stake and key hires. The move hits global contractors even harder, slashing 500 roles in total, Scale confirmed to The Verge.
The layoffs come as part of a major restructuring. CEO Jason Droege is shrinking Scale’s generative AI teams from 16 pods down to five: code, languages, experts, experimental, and audio. The company’s sales and marketing will consolidate into a single “demand generation” team with four targeted pods.
Droege emailed staff that the rapid GenAI expansion over the last year backfired. Too many layers, red tape, and unclear mission created inefficiencies. Market shifts also forced a rethink. 
Jason Droege stated:
“The reasons for these changes are straightforward: we ramped up our GenAI capacity too quickly over the past year,”
"While that felt like the right decision at the time, it’s clear this approach created inefficiencies and redundancies."
"We created too many layers, excessive bureaucracy, and unhelpful confusion about the team’s mission."
"Shifts in market demand also required us to re-examine our plans and refine our approach."
He says the shakeup will help Scale adapt, keep current clients, and win back some who’ve slowed projects. Less promising generative AI efforts will lose priority.
Despite cuts, Droege pointed to Scale’s strong funding and upcoming meetings to realign teams. Meta’s investment and hires came amid AI industry chaos with mergers, poaching, and startups reshuffling.
Scale spokesperson Joe Osborne told The Verge the company plans to hire hundreds more in enterprise, public sector, and international roles later this year. Severance is already paid out.
Osborne added:
“We‘re streamlining our data business to help us move faster and deliver even better data solutions to our GenAI customers.”
For now, the AI data-labeling giant is trimming down fast and doubling down on streamlining its core business.
