Latest news with #Droege
Yahoo
18-07-2025
- Business
- Yahoo
Scale AI reduces workforce following Meta investment
Scale AI, a San Francisco-based data-labelling and technology company, has implemented a significant reduction in its workforce following a multi-billion-dollar investment by Meta. The company confirmed the layoff of 200 employees, which accounts for 14% of its staff. Additionally, it plans to terminate contracts with 500 global contractors. This development comes in the wake of Meta's acquisition of a 49% stake in Scale AI for $14.3bn, as reported by Bloomberg. Interim CEO Jason Droege communicated the restructuring plans to employees, citing the need to address inefficiencies resulting from rapid expansion. In an internal email to staff, Droege stated that the company had expanded its GenAI capacity too rapidly over the past year. This re-evaluation was prompted by shifts in market demand that necessitated a refined operational strategy. The restructuring targets Scale AI's GenAI division, which is involved in managing projects such as AI chatbots like xAI's Grok and Google's Gemini. According to the email, affected employees have been advised against reporting to the office during this transition period. The company has ensured that departing staff will receive appropriate severance packages. As part of the broader organisational changes, several high-ranking officials, including vice presidents and chiefs of staff, have exited the company following Meta's investment. Despite these shifts, Scale AI claims to maintain a strong financial position and plans to expand its workforce in enterprise and public sector roles later this year. Meta's move to acquire a near-majority stake, albeit without voting rights, in Scale AI is aimed at enhancing its competitive edge against entities like OpenAI. Former Scale AI CEO Alexandr Wang has transitioned to the role of chief AI officer at Meta and continues to serve on Scale AI's board of directors. Meta is concurrently establishing Meta Superintelligence Labs as part of this collaboration. Scale AI's business model focuses on providing labelled datasets essential for training machine learning models. Its clientele includes major organisations such as Google, OpenAI, and Anthropic. Recently, Scale AI secured a multi-million-dollar contract with the US Department of Defense, underscoring its role in delivering data solutions for military applications. "Scale AI reduces workforce following Meta investment" was originally created and published by Verdict, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
India Today
17-07-2025
- Business
- India Today
Tech layoffs 2025: After Meta invests billions, Scale AI to lay off 200 employees
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 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 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 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 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 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
Business Times
17-07-2025
- Business
- Business Times
Scale AI to cut 14% of staff following Meta investment
[SAN FRANCISCO] Scale AI is laying off hundreds of employees from its data-labelling business, one-month after Meta Platforms invested US$14.3 billion in the startup and hired away its chief executive officer. The company cut 200 full-time employees, about 14 per cent of its global workforce, and will provide severance, Scale spokesperson Joe Osborne said on Wednesday (Jul 16). Scale will also stop working with 500 of its thousands of global contractors, he said. The move is aimed at 'streamlining our data business to help us move faster,' Osborne said, adding that Scale plans to staff up in other areas including enterprise and government sales. In a note sent to Scale employees on Wednesday, interim CEO Jason Droege said the layoffs were a result of the data labelling business bringing in too many people too quickly over the last year. That led to 'too many layers, excessive bureaucracy, and unhelpful confusion about the team's mission', Droege wrote in the memo, which was viewed by Bloomberg News. Droege added that 'shifts in market demand' also contributed to the decision to restructure. Following the deal with Meta, some of Scale's most prominent customers have phased out work with the startup, including OpenAI and Alphabet's Google, according to reports from Bloomberg and others. Founded in 2016, Scale has long been the best-known name in the market for helping tech firms label and annotate the data needed to build artificial intelligence (AI) models. It generated about US$870 million in revenue in 2024 and expects US$2 billion in revenue this year, Bloomberg News reported in April. In June, Meta finalised its multibillion-dollar investment in Scale, taking a 49 per cent stake in the company. As part of the deal, co-founder Alexandr Wang left the startup to lead a new superintelligence unit at Meta, part of the Facebook parent company's multibillion-dollar investment to catch up on AI development. Despite its position as a leader in the market for providing a key ingredient needed for building AI models, Scale faces a growing raft of rivals, including Turing, Invisible Technologies, Labelbox, and Uber Technologies, all of which also offer services to meet AI developers' bottomless need for data. As some of Scale's clients worried about Meta getting added visibility into their AI development process, competing services have said they've seen a surge in interest from customers. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up In the memo, Droege said he hoped the changes will help position Scale for the long term, make it more efficient, and enable the data-labelling part of the startup to 'focus on the biggest and most profitable opportunities,' he wrote. He also said that the new structure 'will allow us to better serve the customers we have today and win back customers that have slowed down work with us.' Scale is one of several AI companies that have seen key talent hired away in the last year, without being acquired. Most recently, Google inked a US$2.4 billion deal with AI coding startup Windsurf, hiring its CEO and several of its top staffers. The deals raise the question of what happens to the employees left behind after the CEO joins a larger firm. In Windsurf's case, the startup was quickly bought by another AI company. At Scale, the company plans to leverage its war chest, Droege said. 'We remain a well-resourced, well-funded company, and today's announcement will allow us to accelerate new investments and add resources where necessary,' he wrote in the memo. Droege said the startup plans to hone the scope of its data-labelling business to focus on projects related to coding, languages and audio. Osborne said the company plans to hire hundreds of people in the second half of the year for efforts including making custom AI applications and working with government agencies in the US, such as the Defense Department, and around the world. Those parts of the business are currently making nine figures in revenue, Droege previously told Bloomberg. BLOOMBERG
Straits Times
16-07-2025
- Business
- Straits Times
Scale AI to cut 14% of staff after Meta investment, CEO departure
As part of the investment deal, Scale AI co-founder Alexandr Wang left the start-up to lead a new superintelligence unit at Meta. San Francisco – Scale AI is laying off hundreds of employees from its data-labelling business, one month after Meta Platforms invested US$14.3 billion (S$18.3 billion) in the start-up and hired away its chief executive officer. The company cut 200 full-time employees, about 14 per cent of its global workforce, and will provide severance, Scale spokesperson Joe Osborne said on July 16. Scale will also stop working with 500 of its thousands of global contractors, he said. The move is aimed at 'streamlining our data business to help us move faster,' Mr Osborne said, adding that Scale plans to staff up in other areas including enterprise and government sales. In a note sent to Scale employees on July 16, interim CEO Jason Droege said the layoffs were a result of the data labelling business bringing in too many people too quickly over the last year. That led to 'too many layers, excessive bureaucracy, and unhelpful confusion about the team's mission,' Mr Droege wrote in the memo, which was viewed by Bloomberg News. Mr Droege added that 'shifts in market demand' also contributed to the decision to restructure. Following the deal with Meta, some of Scale's most prominent customers have phased out work with the start-up – including OpenAI and Alphabet's Google – according to reports from Bloomberg and others. Founded in 2016, Scale has long been the best-known name in the market for helping tech firms label and annotate the data needed to build AI models. It generated about US$870 million in revenue in 2024 and expects US$2 billion in revenue in 2025, Bloomberg News reported in April. In June, Meta finalised its multibillion-dollar investment in Scale, taking a 49 per cent stake in the company. As part of the deal, co-founder Alexandr Wang left the start-up to lead a new superintelligence unit at Meta, part of the Facebook parent company's multibillion-dollar investment to catch up on AI development. Despite its position as a leader in the market for providing a key ingredient needed for building AI models, Scale faces a growing raft of rivals including Turing, Invisible Technologies, Labelbox, and Uber Technologies, all of which also offer services to meet AI developers' bottomless need for data. As some of Scale's clients worried about Meta getting added visibility into their AI development process, competing services have said they've seen a surge in interest from customers. Scale is one of several AI companies that have seen key talent hired away in the last year, without being acquired. Most recently, Google inked a US$2.4 billion deal with AI coding start-up Windsurf, hiring its CEO and several of its top staffers. The deals raise the question of what happens to the employees left behind after the CEO joins a larger firm. In Windsurf's case, the start-up was quickly bought by another AI company. At Scale, the company plans to leverage its war chest, Mr Droege said. 'We remain a well-resourced, well-funded company, and today's announcement will allow us to accelerate new investments and add resources where necessary,' he wrote in the memo. Mr Droege said the start-up plans to hone the scope of its data-labeling business to focus on projects related to coding, languages and audio. Mr Osborne said the company plans to hire hundreds of people in the second half of 2025 for efforts including making custom AI applications and working with government agencies in the United States – such as the Defense Department – and around the world. Those parts of business are currently making nine figures in revenue, Mr Droege previously told Bloomberg. BLOOMBERG
Yahoo
16-07-2025
- Business
- Yahoo
Scale AI to Cut 14% of Staff Following Meta Investment
(Bloomberg) -- Scale AI is laying off hundreds of employees from its data-labeling business, one month after Meta Platforms Inc. invested $14.3 billion in the startup and hired away its chief executive officer. The Dutch Intersection Is Coming to Save Your Life Advocates Fear US Agents Are Using 'Wellness Checks' on Children as a Prelude to Arrests LA Homelessness Drops for Second Year Manhattan, Chicago Murder Rates Drop in 2025, Officials Say The company cut 200 full-time employees, about 14% of its global workforce, and will provide severance, Scale spokesperson Joe Osborne said Wednesday. Scale will also stop working with 500 of its thousands of global contractors, he said. The move is aimed at 'streamlining our data business to help us move faster,' Osborne said, adding that Scale plans to staff up in other areas including enterprise and government sales. In a note sent to Scale employees on Wednesday, interim CEO Jason Droege said the layoffs were a result of the data labeling business bringing in too many people too quickly over the last year. That led to 'too many layers, excessive bureaucracy, and unhelpful confusion about the team's mission,' Droege wrote in the memo, which was viewed by Bloomberg News. Droege added that 'shifts in market demand' also contributed to the decision to restructure. Following the deal with Meta, some of Scale's most prominent customers have phased out work with the startup — including OpenAI and Alphabet Inc.'s Google — according to reports from Bloomberg and others. Founded in 2016, Scale has long been the best-known name in the market for helping tech firms label and annotate the data needed to build artificial intelligence models. It generated about $870 million in revenue in 2024 and expects $2 billion in revenue this year, Bloomberg News reported in April. In June, Meta finalized its multibillion-dollar investment in Scale, taking a 49% stake in the company. As part of the deal, co-founder Alexandr Wang left the startup to lead a new superintelligence unit at Meta, part of the Facebook parent company's multibillion-dollar investment to catch up on AI development. Despite its position as a leader in the market for providing a key ingredient needed for building AI models, Scale faces a growing raft of rivals including Turing, Invisible Technologies, Labelbox, and Uber Technologies Inc., all of which also offer services to meet AI developers' bottomless need for data. As some of Scale's clients worried about Meta getting added visibility into their AI development process, competing services have said they've seen a surge in interest from customers. In the memo, Droege said he hoped the changes will help position Scale for the long term, make it more efficient, and enable the data-labeling part of the startup to 'focus on the biggest and most profitable opportunities,' he wrote. He also said that the new structure 'will allow us to better serve the customers we have today and win back customers that have slowed down work with us.' Scale is one of several AI companies that have seen key talent hired away in the last year, without being acquired. Most recently, Google inked a $2.4 billion deal with AI coding startup Windsurf, hiring its CEO and several of its top staffers. The deals raise the question of what happens to the employees left behind after the CEO joins a larger firm. In Windsurf's case, the startup was quickly bought by another AI company. At Scale, the company plans to leverage its war chest, Droege said. 'We remain a well-resourced, well-funded company, and today's announcement will allow us to accelerate new investments and add resources where necessary,' he wrote in the memo. Droege said the startup plans to hone the scope of its data-labeling business to focus on projects related to coding, languages and audio. Osborne said the company plans to hire hundreds of people in the second half of the year for efforts including making custom AI applications and working with government agencies in the US — such as the Defense Department — and around the world. Those parts of business are currently making nine figures in revenue, Droege previously told Bloomberg. Forget DOGE. Musk Is Suddenly All In on AI How Starbucks' CEO Plans to Tame the Rush-Hour Free-for-All How Hims Became the King of Knockoff Weight-Loss Drugs Thailand's Changing Cannabis Rules Leave Farmers in a Tough Spot The New Third Rail in Silicon Valley: Investing in Chinese AI ©2025 Bloomberg L.P. Sign in to access your portfolio
