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 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.

Full report : Scale AI says it is laying off 200 full-time employees, or ~14% of its global workforce, and will stop working with 500 contractors, after Meta invested $14.3 billion in it.

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