Elon Musk’s xAI Lays Off 500 Data Annotators
Elon Musk’s xAI has laid off at least 500 employees from its data annotation team, the largest unit working on the Grok chatbot. This move follows the company’s decision to shift focus toward specialist AI tutors. Multiple emails sent to staff outlined that the pivot would take effect immediately, with most generalist tutor positions no longer required.
The data annotation team previously played a vital role in teaching Grok how to interpret the world by categorizing and contextualizing raw data. However, the reorganization now prioritizes specialists who can handle advanced and targeted AI training. Workers were told that while pay would continue through the end of their contracts or until November 30, their system access ended on the same day as the layoff notice.
Despite reducing its largest workforce, xAI announced plans to expand its specialist AI tutor team by “10X.” The sharp contrast between layoffs and hiring signals a major change in strategy, designed to accelerate the company’s pursuit of refined expertise in AI.
Internal Reorganisation After Senior Exits
The restructuring came shortly after several senior employees, including the former team head, had their Slack accounts deactivated. Following these exits, staff members were called into one-on-one sessions to review projects, responsibilities, and achievements. Additionally, they were asked to identify coworkers who had excelled in their roles, further shaping the company’s view of team performance.
Screenshots shared by employees revealed a steep drop in Slack membership for annotators, falling from more than 1,500 members to just over 1,000 within hours. Numbers continued to shrink as the layoffs progressed, showing the scale of the impact.
This shift arrives during a time when the company is realigning priorities. Although the annotation team was once considered central to Grok’s growth, leadership now emphasizes developing highly specialized groups in fields like STEM, coding, finance, and media. The move underscores a strategy that favors depth of expertise over broad generalist input.
Tests Decide Employee Futures
On Thursday evening, xAI instructed employees to prepare for a reorganization test scheduled for the next morning. These assessments, designed by Diego Pasini recently appointed as team leader covered a wide range of areas. Subjects included STEM, coding, finance, and medicine, alongside Grok’s “personality and model behavior.” Other unusual categories involved “shitposters and doomscrollers,” highlighting the company’s effort to address niche internet behaviors.
Some of the tests were also aimed at strengthening chatbot safety, improving “red teaming” processes, and developing multimedia capabilities with audio and video. Both supervisors and generalist tutors were required to participate, with outcomes influencing their future roles. Pasini, who joined earlier this year, is currently on leave from the Wharton School of Business at the University of Pennsylvania.
Through this approach, xAI seeks to restructure teams into specialized units, ensuring Grok’s continued evolution while aligning staff expertise with targeted goals. The layoffs, combined with expansion in specific areas, highlight a clear pivot toward specialization and future scalability.
