Elon Musk’s xAI has laid off at least 500 workers from the data annotation team that is tasked with training Grok AI, according to a recent report by Business Insider.
The company notified its workers of the planned overhaul of its team of generalist AI tutors in emails seen by Business Insider.
"After a thorough review of our Human Data efforts, we've decided to accelerate the expansion and prioritization of our specialist AI tutors, while scaling back our focus on general AI tutor roles. This strategic pivot will take effect immediately," the email read. "As part of this shift in focus, we no longer need most generalist AI tutor positions and your employment with xAI will conclude."
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Employees were told that as of the day of the layoff notice, they would no longer have access to company systems, but they will be paid through either the end of their contract or November 30th.
The data annotation team is xAI’s largest and is responsible for training the company's chatbot Grok through contextualizing and categorizing raw data.
According to Business Insider, the number of members on the company’s Slack room for data annotators shrank from 1,500 to a little over 1,000 over the course of Friday, and that number is continuing to go down.
Already on Thursday, employees were told to prepare for a reorganization of the data annotation team. Additionally, several workers were asked to undergo a series of tests to determine their roles within the company going forward. Business Insider said that these tests would be used to sort annotators and their supervisors based on their strengths and interests, according to an internal screenshot.
Following the news, an xAI spokesperson pointed Business Insider to a company post on X saying that it’s planning to “immediately surge [its] Specialist AI tutor team by 10x”.
Specialist AI tutors at xAI are adding huge value. We will immediately surge our Specialist AI tutor team by 10x!
undefined xAI (@xai) September 13, 2025
We are hiring across domains like STEM, finance, medicine, safety, and many more. Come join us to help build truth-seeking AGI!https://t.co/htpc2RijLG
This comes days after Slack accounts of xAI’s several senior-level employees, including the team's former head, had been deactivated. After that, many workers were pulled into one-on-one meetings for responsibilities and achievements reviews.
Earlier in August, our research team tested Grok 4, focusing on coding, real-time research, and complex problem-solving tasks. You can read more about their full findings here.
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