Elon Musk’s xAI lays off 500 generalist AI tutors, plans specialist expansion

Elon Musk's AI startup xAI has laid off over 500 employees from its data annotation team, primarily affecting generalist AI tutors, as part of a strategic shift to prioritize and expand its team of specialist AI tutors by tenfold. The layoffs were communicated via email, with affected employees losing system access immediately but continuing to receive pay until the end of their contracts or November 30. xAI's data annotation team, which is its largest, plays a critical role in developing the Grok chatbot by contextualizing and categorizing raw data. Following the layoffs, the company is conducting tests and reorganizing roles to better align annotators with their strengths in domains such as STEM, finance, medicine, and safety. The restructuring comes shortly after several senior staff departures, including the CFO, amid xAI's efforts to establish itself as a competitor to OpenAI, Google DeepMind, and Anthropic. Despite workforce reductions, xAI is aggressively recruiting specialists to accelerate development towards building truth-seeking AGI.