Elon Musk’s AI startup xAI laid off 500 team members on Friday night, according to internal messages viewed by Business Insider. The emails reportedly announced an immediate strategic pivot, with the company deciding to accelerate the expansion of its specialist AI tutors while scaling back its focus on general AI tutor roles.
As part of this shift, the company stated it would no longer need most generalist AI tutor positions. Affected employees were informed that their employment with xAI would conclude immediately.
According to reports, these layoffs represent about one-third of xAI’s 1,500-person data annotation team. This team is responsible for labeling and preparing the data used to train xAI’s chatbot, Grok.
When contacted for confirmation, xAI pointed to a public statement declaring the company will immediately surge its Specialist AI tutor team by ten times. The company announced it is hiring across numerous domains including STEM, finance, medicine, and safety.