Scale AI Announces 700 Job Cuts After Meta's Multi-Billion Dollar Stake Amid Data Leak Concerns
Confirming the layoffs, Scale AI spokesperson Joe Osborne said, 'We are streamlining our data business.' The restructuring appears to be a strategic shift in response to rapid expansion that proved unsustainable.
In an internal email addressed to employees and reviewed by The Verge, Scale AI CEO Jason Droege explained the rationale behind the decision. 'The reasons for these changes are straightforward: we ramped up our GenAI capacity too quickly over the past year,' he wrote. '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. Shifts in market demand also required us to re-examine our plans and refine our approach.'
Founded in the U.S., Scale AI plays a pivotal role in helping major tech companies like Google, OpenAI, Anthropic, and Meta by labeling and processing training data for their AI systems. Much of this work is carried out by contractors based outside the United States.
The announcement follows Meta's substantial $14.3 billion investment in Scale AI, securing a 49% stake in the company. As part of the deal, Meta brought back former Scale AI CEO Alexandr Wang to lead its new superintelligence lab. This new division is reportedly recruiting senior talent from leading AI labs. Despite Meta's deep involvement, Scale AI maintains that it continues to operate as an independent entity.
However, the timing of the layoffs has raised eyebrows, especially as the company continues to face backlash over recent security failings. Last month, a damning investigation revealed that at least 85 Google Docs containing sensitive and confidential client information were inadvertently left publicly accessible online.
Among the leaked documents were internal notes and training prompts for AI systems, including those for Google's Bard (now Gemini), and confidential data from Meta and Elon Musk's xAI. Shockingly, some documents also exposed personal information of contractors, including email addresses, payment disputes, and internal performance notes. One file titled 'move all cheating taskers' openly listed names flagged for misconduct and was editable by anyone with access to the link.
While no major clients have publicly severed ties, reports suggest that several companies are reevaluating their relationships with Scale AI in light of the breach. According to a Business Insider report, some clients are growing increasingly cautious due to these lapses in data handling.
As Scale AI navigates this turbulent phase, it remains to be seen whether its restructuring and Meta-backed ambitions can rebuild client trust and realign its mission in the evolving AI landscape.
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Time of India
32 minutes ago
- Time of India
Trump dumps 25% tariff on India from Friday, plus penalty for buying Russian oil
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Hindustan Times
an hour ago
- Hindustan Times
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Economic Times
an hour ago
- Economic Times
Trumpland: What if the world turned US trade war back on America?
AI image Tariff' Trump has announced a 25% levy on Indian goods entering US starting tomorrow, coupled with a penalty for India's continued oil and defence purchases from Russia. Prefixing his announcement on Truth Social with 'while India is a friend', the US president has sought to punish India for asserting sovereign choices in trade and foreign policy. With friends like this, who needs friends? The irony is poetic: the self-declared custodian of free trade is now its most protectionist offender. Economics is built around the principle of movement: of goods, capital, labour and data. This isn't just ideology, it's the physics of prosperity. Yet, the US, once the world's most vocal advocate for free markets, is, in the form of Trumpland, its most disruptive force. From semiconductor export bans and weaponised sanctions to unilateral tariffs and extraterritorial dictates, Trumpland has turned the global economy into a minefield of exceptions, exclusions and coercion. 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Other key materials like lithium and cobalt are also heavily imported from countries like Chile, Canada and Argentina. In total, just four trading partners — China, the EU, Mexico and Canada — each account for more than 10% of US import value. These are not discretionary purchases, but foundational components of American industry. The US is not merely part of global supply chains, but also structurally dependent on them, never mind all that talk of decoupling and University's Budget Lab assessed that the US' 2025 tariff surge has raised its average effective tariff rate to 22.5%, the highest since 1909. This policy shift has led to a 2.3% rise in consumer prices, costing the average household $3,800 annually. Lower-income families are hit hardest, with those in the second income decile losing $1,700 a GDP growth is expected to drop by 0.9 percentage points in 2025. Long-term output is projected to remain 0.6% smaller, a permanent loss of around $180 bn a year. Exports have declined by 18.1%. Prices for essentials have spiked, with apparel up 17%, food nearly 3% higher, and new cars costing an extra $4,000 on from protecting the economy, Trump tariffs are eroding household income, slowing growth and adversely affecting America's economic Walter Scheidel explains in his 2017 book, The Great Leveler, entrenched systems rarely reform themselves through negotiation alone. Meaningful redistribution often follows rupture rather than consensus. So, what might rupture look like today? Imagine the world's major exporters including Europe, China, India, Asean and Latin America agreeing to a coordinated pause in shipments to the US. No semiconductors, no APIs, no telecom equipment. In a matter of weeks, American production lines would slow, inflation would surge, and financial markets would be rattled. It would serve as a powerful reminder that the US economy is not insulated by exceptionalism. It operates on the consent and cooperation of the rest of the world. This isn't about restoring balance. It's a call to deliberately hit the US economy where it hurts, to expose the double standards that define today's global order. In any functioning market, domestic or global, rules matter not only because they enable exchange but also because they constrain abuse. Participation in global trade is characterised by the principle of mutualism and benefits will flow only as long as responsibilities are this fundamental point, the US' economic bullying undermines not just the trust but the very ethos of the current global economic system. The world, India included, now faces a pivotal question. Should it continue to accommodate this exception, or begin to act as a collective? A coordinated stand by global exporters, in defence of systemic integrity, would affirm that globalisation is not the privilege of a single actor but the shared project of many. If the international order is to survive, it must demonstrate that no participant is above its rules. Trumpland may yet learn that the system the US helped create can continue to evolve without its dominance. And that the invisible hand, if constrained long enough, may simply withdraw its reach from the United States. (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of Elevate your knowledge and leadership skills at a cost cheaper than your daily tea. Regulators promote exchanges; can they stifle one? 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