Latest news with #JoeOsborne
Hans India
5 days ago
- Business
- Hans India
Scale AI Announces 700 Job Cuts After Meta's Multi-Billion Dollar Stake Amid Data Leak Concerns
Just weeks after Meta poured billions into Scale AI, the American data-labeling startup is undergoing a major shakeup. The company announced it will lay off approximately 200 full-time employees — around 14% of its workforce — and let go of an additional 500 contractors globally. The decision follows a broader internal restructuring effort and growing concerns over recent data security lapses. Confirming the layoffs, Scale AI spokesperson Joe Osborne said, 'We are streamlining our data business.' The restructuring appears to be a strategic shift in response to rapid expansion that proved unsustainable. In an internal email addressed to employees and reviewed by The Verge, Scale AI CEO Jason Droege explained the rationale behind the decision. 'The reasons for these changes are straightforward: we ramped up our GenAI capacity too quickly over the past year,' he wrote. 'While that felt like the right decision at the time, it's clear this approach created inefficiencies and redundancies. We created too many layers, excessive bureaucracy, and unhelpful confusion about the team's mission. Shifts in market demand also required us to re-examine our plans and refine our approach.' Founded in the U.S., Scale AI plays a pivotal role in helping major tech companies like Google, OpenAI, Anthropic, and Meta by labeling and processing training data for their AI systems. Much of this work is carried out by contractors based outside the United States. The announcement follows Meta's substantial $14.3 billion investment in Scale AI, securing a 49% stake in the company. As part of the deal, Meta brought back former Scale AI CEO Alexandr Wang to lead its new superintelligence lab. This new division is reportedly recruiting senior talent from leading AI labs. Despite Meta's deep involvement, Scale AI maintains that it continues to operate as an independent entity. However, the timing of the layoffs has raised eyebrows, especially as the company continues to face backlash over recent security failings. Last month, a damning investigation revealed that at least 85 Google Docs containing sensitive and confidential client information were inadvertently left publicly accessible online. Among the leaked documents were internal notes and training prompts for AI systems, including those for Google's Bard (now Gemini), and confidential data from Meta and Elon Musk's xAI. Shockingly, some documents also exposed personal information of contractors, including email addresses, payment disputes, and internal performance notes. One file titled 'move all cheating taskers' openly listed names flagged for misconduct and was editable by anyone with access to the link. While no major clients have publicly severed ties, reports suggest that several companies are reevaluating their relationships with Scale AI in light of the breach. According to a Business Insider report, some clients are growing increasingly cautious due to these lapses in data handling. As Scale AI navigates this turbulent phase, it remains to be seen whether its restructuring and Meta-backed ambitions can rebuild client trust and realign its mission in the evolving AI landscape.
India Today
5 days ago
- Business
- India Today
Tech layoffs 2025: After Meta invests billions, Scale AI to lay off 200 employees
Scale AI is laying off around 200 full-time employees, which is about 14 per cent of its workforce. This comes just a month after Meta invested billions into the startup. The job cuts are part of a larger restructuring plan, the company has reportedly said, and will also affect 500 of its global contractors. 'We are streamlining our data business,' Scale spokesperson Joe Osborne said, confirming the layoffs that were first reported by Bloomberg. advertisementJason Droege, CEO of Scale AI also wrote an email to his employees, which was reviewed by The Verge. The email reads: 'The reasons for these changes are straightforward: we ramped up our GenAI capacity too quickly over the past year,'. 'While that felt like the right decision at the time, it's clear this approach created inefficiencies and redundancies. We created too many layers, excessive bureaucracy, and unhelpful confusion about the team's mission. Shifts in market demand also required us to re-examine our plans and refine our approach,' it the uninitiated, ScaleAI is based in the United States and helps tech giants like Google, OpenAI, Anthropic, and Meta label and process training data for their AI models. Much of this work relies on large teams of contractors, many of them working from outside the US. The layoffs come shortly after Meta announced a $14.3 billion deal for a 49 percent stake in Scale AI and brought in its former CEO, Alexandr Wang, to head a new superintelligence lab. That lab is now being filled with senior staff reportedly poached from other leading AI labs. Despite this close partnership, Scale AI has said it continues to operate news of the lay-off also comes just weeks after the company came under some serious criticism for its data security practices. An investigation by last month revealed that at least 85 Google Docs containing confidential client information and internal notes were publicly accessible. These documents reportedly included details from AI training projects with major tech firms such as Google, Meta, and Elon Musk's the exposed files were training prompts meant for improving Google's Bard chatbot (now Gemini), internal feedback on the models' weaknesses, and even a confidential xAI project called 'Project Xylophone' designed to help train AI on conversation styles. There were also audio files tied to Meta's chatbot addition to project details, some spreadsheets reportedly contained personal information of contractors, including emails, payment issues, and notes on performance. One document titled 'move all cheating taskers' listed hundreds of names flagged for suspected misconduct, and was editable by anyone with the recent leaks have raised concerns among some of Scale's biggest clients. While no formal fallout has been reported. However, according to a Business Insider report, some companies were reconsidering their partnerships in light of the breach.- Ends
Business Times
5 days ago
- Business
- Business Times
Scale AI to cut 14% of staff following Meta investment
[SAN FRANCISCO] Scale AI is laying off hundreds of employees from its data-labelling business, one-month after Meta Platforms invested US$14.3 billion in the startup and hired away its chief executive officer. The company cut 200 full-time employees, about 14 per cent of its global workforce, and will provide severance, Scale spokesperson Joe Osborne said on Wednesday (Jul 16). Scale will also stop working with 500 of its thousands of global contractors, he said. The move is aimed at 'streamlining our data business to help us move faster,' Osborne said, adding that Scale plans to staff up in other areas including enterprise and government sales. In a note sent to Scale employees on Wednesday, interim CEO Jason Droege said the layoffs were a result of the data labelling business bringing in too many people too quickly over the last year. That led to 'too many layers, excessive bureaucracy, and unhelpful confusion about the team's mission', Droege wrote in the memo, which was viewed by Bloomberg News. Droege added that 'shifts in market demand' also contributed to the decision to restructure. Following the deal with Meta, some of Scale's most prominent customers have phased out work with the startup, including OpenAI and Alphabet's Google, according to reports from Bloomberg and others. Founded in 2016, Scale has long been the best-known name in the market for helping tech firms label and annotate the data needed to build artificial intelligence (AI) models. It generated about US$870 million in revenue in 2024 and expects US$2 billion in revenue this year, Bloomberg News reported in April. In June, Meta finalised its multibillion-dollar investment in Scale, taking a 49 per cent stake in the company. As part of the deal, co-founder Alexandr Wang left the startup to lead a new superintelligence unit at Meta, part of the Facebook parent company's multibillion-dollar investment to catch up on AI development. Despite its position as a leader in the market for providing a key ingredient needed for building AI models, Scale faces a growing raft of rivals, including Turing, Invisible Technologies, Labelbox, and Uber Technologies, all of which also offer services to meet AI developers' bottomless need for data. As some of Scale's clients worried about Meta getting added visibility into their AI development process, competing services have said they've seen a surge in interest from customers. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up In the memo, Droege said he hoped the changes will help position Scale for the long term, make it more efficient, and enable the data-labelling part of the startup to 'focus on the biggest and most profitable opportunities,' he wrote. He also said that the new structure 'will allow us to better serve the customers we have today and win back customers that have slowed down work with us.' Scale is one of several AI companies that have seen key talent hired away in the last year, without being acquired. Most recently, Google inked a US$2.4 billion deal with AI coding startup Windsurf, hiring its CEO and several of its top staffers. The deals raise the question of what happens to the employees left behind after the CEO joins a larger firm. In Windsurf's case, the startup was quickly bought by another AI company. At Scale, the company plans to leverage its war chest, Droege said. 'We remain a well-resourced, well-funded company, and today's announcement will allow us to accelerate new investments and add resources where necessary,' he wrote in the memo. Droege said the startup plans to hone the scope of its data-labelling business to focus on projects related to coding, languages and audio. Osborne said the company plans to hire hundreds of people in the second half of the year for efforts including making custom AI applications and working with government agencies in the US, such as the Defense Department, and around the world. Those parts of the business are currently making nine figures in revenue, Droege previously told Bloomberg. BLOOMBERG
Yahoo
6 days ago
- Business
- Yahoo
Scale AI to Cut 14% of Staff Following Meta Investment
(Bloomberg) -- Scale AI is laying off hundreds of employees from its data-labeling business, one month after Meta Platforms Inc. invested $14.3 billion in the startup and hired away its chief executive officer. The Dutch Intersection Is Coming to Save Your Life Advocates Fear US Agents Are Using 'Wellness Checks' on Children as a Prelude to Arrests LA Homelessness Drops for Second Year Manhattan, Chicago Murder Rates Drop in 2025, Officials Say The company cut 200 full-time employees, about 14% of its global workforce, and will provide severance, Scale spokesperson Joe Osborne said Wednesday. Scale will also stop working with 500 of its thousands of global contractors, he said. The move is aimed at 'streamlining our data business to help us move faster,' Osborne said, adding that Scale plans to staff up in other areas including enterprise and government sales. In a note sent to Scale employees on Wednesday, interim CEO Jason Droege said the layoffs were a result of the data labeling business bringing in too many people too quickly over the last year. That led to 'too many layers, excessive bureaucracy, and unhelpful confusion about the team's mission,' Droege wrote in the memo, which was viewed by Bloomberg News. Droege added that 'shifts in market demand' also contributed to the decision to restructure. Following the deal with Meta, some of Scale's most prominent customers have phased out work with the startup — including OpenAI and Alphabet Inc.'s Google — according to reports from Bloomberg and others. Founded in 2016, Scale has long been the best-known name in the market for helping tech firms label and annotate the data needed to build artificial intelligence models. It generated about $870 million in revenue in 2024 and expects $2 billion in revenue this year, Bloomberg News reported in April. In June, Meta finalized its multibillion-dollar investment in Scale, taking a 49% stake in the company. As part of the deal, co-founder Alexandr Wang left the startup to lead a new superintelligence unit at Meta, part of the Facebook parent company's multibillion-dollar investment to catch up on AI development. Despite its position as a leader in the market for providing a key ingredient needed for building AI models, Scale faces a growing raft of rivals including Turing, Invisible Technologies, Labelbox, and Uber Technologies Inc., all of which also offer services to meet AI developers' bottomless need for data. As some of Scale's clients worried about Meta getting added visibility into their AI development process, competing services have said they've seen a surge in interest from customers. In the memo, Droege said he hoped the changes will help position Scale for the long term, make it more efficient, and enable the data-labeling part of the startup to 'focus on the biggest and most profitable opportunities,' he wrote. He also said that the new structure 'will allow us to better serve the customers we have today and win back customers that have slowed down work with us.' Scale is one of several AI companies that have seen key talent hired away in the last year, without being acquired. Most recently, Google inked a $2.4 billion deal with AI coding startup Windsurf, hiring its CEO and several of its top staffers. The deals raise the question of what happens to the employees left behind after the CEO joins a larger firm. In Windsurf's case, the startup was quickly bought by another AI company. At Scale, the company plans to leverage its war chest, Droege said. 'We remain a well-resourced, well-funded company, and today's announcement will allow us to accelerate new investments and add resources where necessary,' he wrote in the memo. Droege said the startup plans to hone the scope of its data-labeling business to focus on projects related to coding, languages and audio. Osborne said the company plans to hire hundreds of people in the second half of the year for efforts including making custom AI applications and working with government agencies in the US — such as the Defense Department — and around the world. Those parts of business are currently making nine figures in revenue, Droege previously told Bloomberg. Forget DOGE. Musk Is Suddenly All In on AI How Starbucks' CEO Plans to Tame the Rush-Hour Free-for-All How Hims Became the King of Knockoff Weight-Loss Drugs Thailand's Changing Cannabis Rules Leave Farmers in a Tough Spot The New Third Rail in Silicon Valley: Investing in Chinese AI ©2025 Bloomberg L.P. Sign in to access your portfolio
The Verge
6 days ago
- Business
- The Verge
Scale AI lays off 200 employees: ‘We ramped up our GenAI capacity too quickly'
Scale AI, the AI industry's chief data dealer, will lay off 14 percent of its workforce, or about 200 employees, just one month after Meta took a multibillion-dollar stake in the company and hired its CEO and other staff. The layoffs include 500 of its global contractors, Scale spokesperson Joe Osborne told The Verge, adding that it's all part of a broader restructuring as the company commits to streamlining its data business. Bloomberg was the first to report on the news of the layoffs. Scale AI is an AI data labeling company. It uses human workers — often sourced from outside the US — to annotate the data used by companies like Google, OpenAI, and Anthropic to train their AI models. The news comes amid a major shake-up in the AI industry as mergers and acquisitions, quasi acqui-hires, and defections from one startup to another run rampant. On July 11th, The Verge was first to report that OpenAI's deal with Windsurf was off and that Google would be hiring Windsurf CEO Varun Mohan, cofounder Douglas Chen, and some of Windsurf's R&D employees. Last month, Meta paid $14.3 billion for a 49 percent stake in Scale AI and also launched a superintelligence lab helmed by the company's former CEO, Alexandr Wang. Meta has since started to build out the lab with high-level staff from its rivals. Jason Droege, CEO of Scale AI, sent an email to all Scale employees today, which was viewed by The Verge. Droege said he plans to restructure several parts of Scale's generative AI business and organize it from 16 pods to 'the five most impactful': code, languages, experts, experimental, and audio. The company will also reorganize its go-to-market team into a single 'demand generation' team that will have four pods, each covering a specific set of customers. 'The reasons for these changes are straightforward: we ramped up our GenAI capacity too quickly over the past year,' Droege wrote. 'While that felt like the right decision at the time, it's clear this approach created inefficiencies and redundancies. We created too many layers, excessive bureaucracy, and unhelpful confusion about the team's mission. Shifts in market demand also required us to re-examine our plans and refine our approach.' Droege said that he believes the changes to the company will make it more able to adapt to market shifts, serve existing customers, and win back customers that have 'slowed down' work with Scale. He also said that the company would deprioritize generative AI projects with less growth potential. 'We remain a well-resourced, well-funded company,' he wrote. Scale's generative AI business unit will have an all-hands meeting tomorrow, followed by a company-wide meeting on July 18th. Osborne said that Scale plans to increase investment and hire hundreds of new employees in areas like enterprise, public sector, and international public sector, in the second half of 2025 and that severance has been paid out to impacted roles. 'We're streamlining our data business to help us move faster and deliver even better data solutions to our GenAI customers,' he said.
