Artificial intelligence (AI) startup Scale AI announced Wednesday that it is laying off 200 of its employees, which amounts to around 14% of the workforce, shortly after Meta invested $14.3 billion into the company and poached its CEO.
Scale AI’s interim CEO Jason Droege said that the startup ramped up its generative AI capacity “too quickly” and created too many layers of “excessive bureaucracy.” He said Scale AI remains a well-resourced and well-funded company. Most of the laid off staff are in the data labelling business.
“These changes will make us more nimble — enabling us to react more quickly to shifts in the market and customer needs,” Droege said, in a memo viewed by CNBC. “This structure will allow us to better serve the customers we have today and win back customers that have slowed down work with us.”
READ: More people join Meta; Play AI’s ‘entire’ team to lead AI-driven voice solutions (July 14, 2025)
The layoffs come just a month after Meta invested $14.3 billion into Scale AI, acquiring a 49% stake, and hired Scale AI CEO Alexandr Wang for its superintelligence team. Founded in 2016, Scale AI is known for helping major tech companies like OpenAI, Google and Microsoft prepare the data they use to train cutting-edge AI models. OpenAI and Google have been winding down their work with Scale AI following the Meta deal, according to Reuters.
Droege, who became CEO after Wang switched to Meta, also mentioned that Scale AI will “significantly increase headcount” across its application business units in the second half of the year, including within its enterprise, public sector and international public sector divisions.
The startup used to have a workforce of 1,400 people globally prior to the cuts. Spokesperson Joe Osborne said that affected employees have been provided severance. The company is also ending work with 500 contractors out of thousands worldwide, he added.
“We’re streamlining our data business to help us move faster and deliver even better data solutions to our GenAI customers,” Osborne told CNBC in a statement. “We also plan to make significant investments and hiring across our enterprise and government AI businesses.”
READ: Meta invests $14.3 billion in Scale AI, brings CEO Alexandr Wang onboard (June 13, 2025)
“I want to extend our deepest gratitude for their valuable contributions and dedication to our company,” Droege added in the memo.
Meta has been on a spree lately, with acquisitions, investments and hiring. The company had recently acquired voice cloning startup Play AI and brought its entire team on board. Earlier, it had recruited Daniel Gross, the CEO of OpenAI co-founder Ilya Sutskever’s startup Safe Superintelligence (SSI), following a failed attempt to acquire the same company. It also recently invested $3.5 billion into eyewear company EssilorLuxottica in order to further its efforts developing AI-powered wearable technology.
Meta has also been accused of poaching high level employees from other companies like OpenAI, offering as much as $100 million in bonuses to do so. The company has recruited top OpenAI researchers Trapit Bansal, Lucas Beyer, Alexander Kolesnikov, and Xiaohua Zhai, as well as Apple’s Ruoming Pang. Most of these hires are expected to work at Meta’s superintelligence lab.