WASHINGTON (dpa-AFX) - Scale AI, a leading data-labeling firm for artificial intelligence, is cutting 200 full-time positions about 14 percent of its workforce and terminating 500 contractor roles, the company announced Wednesday.
The layoffs come just weeks after Meta poured $14.3?billion into Scale and hired founder Alexandr Wang to lead its new AI division, Meta Superintelligence Labs.
Interim CEO Jason Droege said in a memo that Scale expanded its generative AI business 'too quickly,' creating inefficiencies and unnecessary bureaucracy. 'These changes will make us more agile better able to respond to market shifts, serve existing customers, and win back those who've slowed engagement,' Droege wrote.
The restructuring will reduce Scale's GenAI teams from 16 pods to five key areas-code, language, experts, experimental, and audio while consolidating its sales and marketing functions into a single 'demand generation' group.
Founded in 2016, Scale AI gained prominence by providing annotated data for companies like OpenAI, Google, and Microsoft. But after its deepened ties with Meta, both OpenAI and Google have scaled back their partnerships, Reuters reported.
Despite the cuts, Scale plans to add hundreds of roles later this year across enterprise, public sector, and international markets. 'We remain well-funded and positioned for growth,' spokesperson Joe Osborne said, noting that severance packages have been provided.
The move underscores a shifting AI landscape where demand for raw data services is slowing as companies pivot toward advanced applications. Scale aims to streamline operations and refocus resources to stay competitive in an industry undergoing rapid transformation.
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