Elon Musk’s xAI has Cut 500 Data Annotation Employees

Elon Musk’s xAI fired at least 500 workers from its data annotation team. According to a report by Business Insider, this big step has affected one-third of the team’s 1500 members. Layoffs were sent through internal email targeting generalist AI tutors who were responsible for labelling, contextualising, and categorising wide amounts of raw data to train xAI’s flagship chatbot, Grok.

On Friday, an email was sent to affected workers stating that xAI is reducing its focus on general AI tutor roles and will shift to prioritise and significantly boost its specialist AI tutor workforce. 

“After a thorough review of our Human Data Efforts, we’ve decided to accelerate the expansion and prioritisation of our specialist AI tutors, while scaling back our focus on general AI tutor roles. This strategic pivot will take effect immediately. As part of this shift in focus, we no longer need most generalist AI tutor positions, and your employment with xAI will conclude,” the email read. 

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Affected employees are promised to be paid through the end of their contracts on November 30, 2025, mainly those operating various tasks without deep domain-specific knowledge, but their access to the company system was voided immediately. One of the anonymous workers says that the timing was “pretty shady”, noting it happened after hours on a Friday, catching many off guard.