Scale AI is conducting layoffs of 200 employees, approximately 14% of its workforce, while also severing connections with 500 global contractors. These changes follow the recent hire of Scale AI's CEO by Meta in a $14.3 billion deal. Interim CEO Jason Droege stated that the company had scaled its data labeling business too quickly, and plans to refocus efforts on enterprise and government sales. The company faces challenges similar to other AI startups as it adjusts to shifts in customer relations and market demands.
Scale AI is laying off 200 employees, roughly 14% of its staff, amid a reduction of ties with 500 global contractors as part of its pivot strategy.
Interim CEO Jason Droege highlighted that Scale AI had expanded its data labeling business too quickly, necessitating a shift towards enterprise and government sales.
The cuts come shortly after Meta's acquisition of Scale AI's CEO for $14.3 billion, impacting customer relations and prompting a change in business direction.
Like other AI startups facing similar challenges, such as Inflection, Scale AI is now reevaluating its core business model in light of changing customer needs.
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