xAI reportedly lays off 500 workers from data annotation team

Elon Musk’s AI startup xAI laid off 500 team members on Friday night, according to internal messages viewed by Business Insider.

These emails reportedly announce an immediate “strategic pivot,” with the company deciding to  “accelerate the expansion and prioritization of our specialist AI tutors, while scaling back our focus on general AI tutor roles.”

“As part of this shift in focus, we no longer need most generalist AI tutor positions and your employment with xAI will conclude,” xAI reportedly wrote.

According to Business Insider, these cuts represent about one-third of xAI’s 1,500-person data annotation team — the team that works to label and prepare data used to train xAI’s chatbot Grok.

When contacted for confirmation, xAI pointed to a statement on X (the Musk-owned social network that it acquired earlier this year) declaring that the company “will immediately surge our Specialist AI tutor team by 10x.”

“We are hiring across domains like STEM, finance, medicine, safety, and many more,” the company said.