Tech layoffs 2025: After Meta invests billions, Scale AI to lay off 200 employees

India Today

7 days ago

Scale AI is laying off around 200 full-time employees, which is about 14 per cent of its workforce. This comes just a month after Meta invested billions into the startup. The job cuts are part of a larger restructuring plan, the company has reportedly said, and will also affect 500 of its global contractors. 'We are streamlining our data business,' Scale spokesperson Joe Osborne said, confirming the layoffs that were first reported by Bloomberg. advertisementJason Droege, CEO of Scale AI also wrote an email to his employees, which was reviewed by The Verge. The email reads: 'The reasons for these changes are straightforward: we ramped up our GenAI capacity too quickly over the past year,'. '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,' it adds.For the uninitiated, ScaleAI is based in the United States and helps tech giants like Google, OpenAI, Anthropic, and Meta label and process training data for their AI models. Much of this work relies on large teams of contractors, many of them working from outside the US.
The layoffs come shortly after Meta announced a $14.3 billion deal for a 49 percent stake in Scale AI and brought in its former CEO, Alexandr Wang, to head a new superintelligence lab. That lab is now being filled with senior staff reportedly poached from other leading AI labs. Despite this close partnership, Scale AI has said it continues to operate independently.The news of the lay-off also comes just weeks after the company came under some serious criticism for its data security practices. An investigation by last month revealed that at least 85 Google Docs containing confidential client information and internal notes were publicly accessible. These documents reportedly included details from AI training projects with major tech firms such as Google, Meta, and Elon Musk's xAI.Among the exposed files were training prompts meant for improving Google's Bard chatbot (now Gemini), internal feedback on the models' weaknesses, and even a confidential xAI project called 'Project Xylophone' designed to help train AI on conversation styles. There were also audio files tied to Meta's chatbot development.In addition to project details, some spreadsheets reportedly contained personal information of contractors, including emails, payment issues, and notes on performance. One document titled 'move all cheating taskers' listed hundreds of names flagged for suspected misconduct, and was editable by anyone with the link.The recent leaks have raised concerns among some of Scale's biggest clients. While no formal fallout has been reported. However, according to a Business Insider report, some companies were reconsidering their partnerships in light of the breach.- Ends