Scale AI Shifts Focus, Lays Off 14% After Meta Deal

Scale AI, a San Francisco-based data labeling startup, laid off 14% of its workforce—around 200 full-time employees—and ended contracts with 500 contractors shortly after Meta invested $14.3 billion and hired CEO Alexandr Wang to lead its Superintelligence initiative. The restructuring comes as Scale shifts its focus from traditional data labeling to generative AI and enterprise applications, following rapid expansion and increased bureaucracy. Interim CEO Jason Droege cited overhiring and changing market demand as reasons for the cuts, while also planning to increase hiring in enterprise and government sectors later in the year. The Meta investment has caused major clients such as Google and OpenAI to reduce or end partnerships with Scale AI, with questions emerging about data security. Despite the upheaval, Scale AI asserts it remains well-funded and committed to growth. Some reports noted that affected employees lost system access before being officially notified of layoffs.