San Francisco AI company lays off 200 after Meta's multibillion-dollar deal
The cuts, announced in a company-wide memo on Wednesday by interim CEO Jason Droege, mark a dramatic shift for the once high-flying San Francisco startup, which has played a critical role in preparing data for major AI players including OpenAI, Google and Microsoft.
'The reasons for these changes are straightforward: we ramped up our GenAI capacity too quickly over the past year,' Droege wrote in the memo obtained by multiple media outlets. '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.'
Scale AI's generative AI division — the unit at the heart of the layoffs — is being reorganized from 16 pods into five focused teams: code, languages, experts, experimental and audio. The company's go-to-market team will also be consolidated into a single 'demand generation' group.
The company emphasized that it remains well-funded and is preparing to 'significantly increase headcount' in enterprise and government-facing business units later this year.
The layoffs follow an industry-wide reckoning over shifting partnerships.
A spokesperson for the company said affected employees have been provided severance, with full-time roles paid through mid-September.
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Scientific American
28 minutes ago
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Why I'm Suing OpenAI, the Creator of ChatGPT
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'Remember, Apple has never been first to market with anything. They're considered to be the most innovative company in the world, but they have largely taken a concept that's been proven and made it applicable for use in ways that are highly innovative and esthetically appealing.' Still, the clock has been ticking for a while. 'I would be shocked if within the next 12 months they do not release a truly functioning baseline agent to replace Siri.' When might Cook be thinking of stepping down? 'That's really the foundational question. If it's two years, are there any outsiders who could plausibly come in? Are there any boomerang people who could come back from outside of Apple?' 'Apple is less likely to go outside because of the cultural history of outsiders at Apple. It's almost revered, the story of how outsiders almost killed Apple [before Steve Jobs returned in 1997]. We hear pretty consistently that Cook is thinking of an age 68 to 70 timeline [which would be three to five years from now.] He feels that, with AI, there's some unfinished business.' 'I don't think Tim will be CEO until he's 70. I think he's tired, honestly. It's been an exhausting journey, and he's amazing, but I do sense a different energy.' What kind of executive will Cook's successor be? 'The common wisdom is that they really need a product visionary, as opposed to the operational genius that he was. I would argue that until the tariff and supply chain issues get resolved, they probably do need him at the helm because that is a non-trivial issue for them.' Who are the leading candidates to succeed Cook? 'The most obvious are John [Ternus] and Craig [Federighi].' Ternus is senior vice president hardware engineering. Federighi is senior vice president software engineering. 'But given the timeline, [the company] could still make quite a few changes, and it could be somebody quite different.' 'There are a few companies where being a CEO is really like being the president of a country, and Apple is one of those. There are maybe a dozen. It sounds kind of heretical to say, but to some degree, the smaller part of the job is effectively operating the company.' Bottom line, what is the big-picture assessment of Tim Cook? For this we turn to a business historian, Richard Tedlow, an emeritus professor at the Harvard Business School. Like any good professor, he asks questions. He starts by asking five crucial questions about Apple: Does it satisfy customers? Does it come from behind? Does it have a powerful corporate culture? Is it willing to admit mistakes? Does it have 'an imagination of disaster,' a realization that things could go badly wrong? Approvingly, he answers Yes to all. Told that a Wall Street research firm has said Cook should resign, Tedlow notes that Warren Buffett invited Cook to Berkshire Hathaway's annual meeting in May and said, 'I'm somewhat embarrassed to say that Tim Cook has made Berkshire a lot more money than I've ever made [for] Berkshire Hathaway.' Tedlow asks, 'If that Wall Street firm called Buffett and said, 'Warren, do you think it's time to get rid of Tim Cook,' what do you think Warren would say?' Tedlow's ultimate query: 'If you could choose anybody to be the CEO of Apple right now—anybody in the whole history of business, from John Jacob Astor to John D. Rockefeller to Tom Watson Sr. to Andy Grove to Tim Cook—whom would you choose? This is actually not a difficult question.' This story was originally featured on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
