Scale AI is slashing jobs after Meta scooped up a 49% stake and bumped Alexandr Wang to lead its new Superintelligence Labs division. The cuts hit the generative AI teams hard, shedding staff fast and messy.
The issue started with what interim CEO Jason Droege called "overly rapid expansion" in GenAI last year. He flagged inefficiencies, bureaucracy, and fuzzy goals as major pain points.
“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,” Droege wrote in an internal memo.
He also pointed to “excessive bureaucracy” and unclear team missions behind the shakeup.
Scale AI is condensing 16 GenAI teams into just five core groups to trim waste and prioritize profitable AI projects.
Layoffs came abruptly. Some employees were locked out of systems before getting official word. Those cut will stay paid through mid-September and qualify for severance if they sign termination agreements.
Despite the downsizing, Scale says it’s well-funded. The company plans to boost investment in AI for enterprise, government, and international markets in H2 2025.
The timing sparked alarm among major customers like Google, OpenAI, and xAI. Sources say they’re weighing cutbacks or ending partnerships over data security worries and Meta’s new ownership role conflicts.
Stay tuned as Scale AI navigates ownership changes, internal chaos, and partner jitters.
