Elon Musk’s xAI cuts 500 jobs in major shift to specialist AI tutors

Elon Musk’s AI company, xAI, laid off at least 500 employees on its data annotation team late Friday, marking a major reorganisation of the workforce tasked with training its AI chatbot, Grok.

The affected employees received emails notifying them that xAI would scale back generalist AI tutor roles while accelerating its focus on specialist AI tutors, Caliber.Az reports via US media.

"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," the company wrote. "As part of this shift in focus, we no longer need most generalist AI tutor positions, and your employment with xAI will conclude."

Employees were told they would continue to receive pay through the end of their contracts or November 30, but access to company systems was cut off immediately upon receiving the layoff notice.

The data annotation team is xAI’s largest, playing a critical role in developing Grok by helping the AI understand the world through contextualising and categorising raw data. On Friday afternoon, the main Slack channel for annotators had more than 1,500 members; by Friday evening, screenshots showed just over 1,000, with numbers continuing to decline as the layoffs took effect.

Despite the layoffs, xAI announced on X that it is hiring for specialist AI tutor roles, planning to grow that team tenfold.

The layoffs follow the recent deactivation of Slack accounts belonging to several senior employees, including the former head of the annotation team. In the days prior, workers were called into one-on-one meetings to review responsibilities, projects, and achievements. They were also asked to highlight colleagues for their hard work.

On September 11, xAI instructed employees to prepare for a major reorganisation of the data annotation team. A team-wide announcement the previous night asked staff to halt ongoing work and complete a series of tests by Friday morning Pacific Time. These tests were designed to sort annotators and supervisors according to their strengths and interests.

The tests, overseen by Diego Pasini—who recently became the team leader—covered standard fields such as STEM, coding, finance, and medicine, as well as more unconventional areas including Grok’s "personality and model behaviour" and “shitposters and doomscrollers." Additional tests focused on improving Grok’s safety, such as "red teaming" exercises, and included audio and video content evaluation.

Pasini, who joined xAI in January, is on leave from the Wharton School of Business at the University of Pennsylvania, according to his LinkedIn profile. 

The announcement clarified that the tests were intended for supervisors and generalist tutors. xAI divides its staff into specialised teams—STEM, coding, finance, legal, and media—while a large pool of generalist tutors handles a wide range of assignments, from annotating audio and video to writing.

Some tests were conducted on platforms such as CodeSignal for STEM and coding, while others were hosted on Google Forms. More than 200 employees responded to Pasini’s Slack message with a green check-mark emoji, and over 100 replied with questions or comments.

However, some workers voiced frustration at the tight testing deadlines. One employee wrote, "Doing this after people have gone home for the day is pretty shady," and reported that their Slack account was deactivated shortly afterwards.

By Tamilla Hasanova