Elon Musk’s xAI Lays Off Around 500 Employees, Roles Supporting Grok Chatbot Training Impacted

Elon Musk’s company, xAI, has laid off about 500 employees, affecting its annotation team that trains the Grok chatbot. This move is part of a sudden restructuring effort by xAI, for which it also sent an email to the employees, according to a Business Insider report.

The company sent an internal email to staff, which noted that the general tutoring roles were being cut. Workers would be paid through November 30 or their original contract end dates, the report added.

However, laid off employees lost their system access the same day, on Sept. 13. Several senior managers, including the former team lead, lost their Slack access and many staff were called into one-on-one review meetings over their projects and performances.

As per a Techspot report, at its peak, the xAI annotation team had over 1,500 employees. These workers helped train Grok by labelling and organising data. That data is used to teach the chatbot how to answer questions and understand content.

By Friday, the Slack channel for annotators had dropped to just over 1,000 members, the report added. With the structuring, xAI now wants to focus on “specialist tutors” instead of generalist roles, the Business Insider report mentioned. The company is seeking to hire workers with expertise in areas like science, coding, finance, law and media. They will replace generalists, who worked across many formats like text, audio, and video.

On Saturday, xAI took to the social media platform X to post: “Specialist AI tutors at xAI are adding huge value.  We will immediately surge our Specialist AI tutor team by 10 times.”

Prior to the layoffs, more than 200 employees confirmed receiving tests that were a part of xAI’s reorganisation process. They covered topics like science, finance, coding, safety and internet behaviour. The employees were to complete at least one of the assessment tests by Friday morning, which would play a role in determining their future at the company. 

"Doing this after people have gone home for the day is pretty shady," one worker wrote in Slack before xAI deactivated their account, according to Techspot.

It’s not clear how many employees were retained following these tests.