Scale AI Slashes 200 Jobs Weeks After Meta’s $14.3bn Deal, Citing Overexpansion and Bureaucracy

A few weeks after Meta paid $ 14.3 billion on the AI scale and hired its founder, Alexandr Wang, to direct its new AI division, the startup dismissed 200 full -time employees – around 14% of its staff – in a significant restructuring movement aimed at reducing excess and restoring the operational objective.

The job cuts were announced by the acting CEO of the AI scale, Jason Droege, in a memo to employees on Wednesday. Droege, who intervened after Wang joined Meta as director of chief AI, recognized that the company had increased its generation of AI, leading to layers of bureaucracy and ineffectiveness which, he said, darkened the mission of the company.

“Although it looked like the right decision at the time, it is clear that this approach created ineffectures and redundancies,” said Droege in memo. “We have created too many layers, excessive bureaucracy and unnecessary confusion about the team’s mission.”

The layoffs arise in the midst of increasing questions on the scale of profitability and sustainability of the AI, in particular after having extended its workforce to 1,400 on a global scale and strongly based on contracts of main players such as Openai, Google and Microsoft. But last year, Openai considerably completed his collaboration with Scale, and Google would have started to cut links with the startup following its in -depth alliance with Meta.

Bloomberg first pointed out the number of job cuts, which later confirmed the AI scale. In addition to layoffs, the company also ends contracts with 500 entrepreneurs, reducing the extent of its workforce not used as part of a wider pivot.

Despite the reshuffle, Droege assured employees that the AI scale remains a well -funded and more in -depth company. He stressed that layoffs did not concern survival but strategic recalibration.

“These changes will make us more agile-allowing us to react more quickly to market changes and customer needs,” he said.

The restructuring aims to rationalize the company generating the company’s AI, from 16 “pods” to five key concentration areas and by merging various commercial development roles in a single request generation team. The company said that it would deprive Genai projects which generate little income or show low growth potential in the context of its efforts to become more effective and evolve towards profitability – a point that Droege seemed to recognize in its memo.

However, after publication, a company spokesman challenged the idea that Droege qualified the company as profitable, while refusing to clarify the declaration.

In the future, the AI scale plans to double its corporate and public sector divisions. Droege said that the company “would considerably increase the workforce” to the second half of 2025 in these units, especially in its international public sector activities.

Founded in 2016 by Alexandr Wang, Scale AI made its name as a critical player behind the scenes in the AI revolution, providing labeling and infrastructure services used to form large models for Openai, Google and others. Its reputation has jumped while the demand for generative exploded in the wake of the Openai Chatppt, but this growth seems to have exceeded strategic planning.

The meta-scale partnership, which included the acquisition of Meta of Key Scale Talent and the appointment of Wang to direct Meta Superintelligence Labs, raised the eyebrows in the industry. The initiates say that the Alliance may have triggered nervousness among other customers of large technologies such as Google and Microsoft, who would now have reduced links with the scale due to conflicts of potential interests.

The scale spokesman Joe Osborne said that affected workers have been offered compensation and that the company would continue to invest massively in new AI initiatives.

“We rationalize our data company to help us evolve more quickly and provide even better data solutions to our Genai customers,” he said, adding that hiring in the government and IA company sectors would remain a priority.

Droege, in his message to staff, expressed his gratitude to people affected by the cuts, describing their contributions as an instrumental of Scale’s growth. However, this decision highlights the growing pain that many IA companies know because they go from early media threw and experimentation to monetization and long -term strategy.

Development also points out a moment that gives reflection in the gold rush of the Silicon Valley AI – even well -capitalized startups are starting to tighten their belts, realizing that brutal expansion without profitability or concentration can be as dangerous as it is late.