AI Tutors Laid Off by xAI Amid Grok Development

Key Points

• Layoffs: xAI has laid off at least 500 employees from its data annotation team, which is its largest.
• Notification: Affected employees were informed via email on September 12 about the downsizing.
• Future Hiring: xAI plans to expand its specialist AI tutor team by 10 times, focusing on hiring within STEM fields.
• Notable Departures: The layoffs follow several high-profile exits, including the chief financial officer Mike Liberatore.

xAI has laid off at least 500 workers from its data annotation team, the company’s largest, according to Business Insider. The annotation team is in charge of categorizing and contextualizing raw data used to train Grok so that it can understand the world better. Business Insider says the laid off employees were informed via email on the evening of September 12, Friday, that it was going to downsize its team of general AI tutors. They were reportedly told that they would be paid their salaries until the end of their contracts on November 30, but their access to xAI’s systems had been cut off after they received the notice.

When Reuters asked the company for a comment, it referred to a post on X wherein it posted a call for specialist AI tutors instead. xAI said that it will “immediately surge [its] Specialist AI tutor team by 10x” and that it’s hiring across STEM fields. As specialist tutors, the new hires will be “enhancing [the company’s] AI technologies through high-quality inputs, labels and annotations using specialized software.” They’ll gather data and provide their own, not only in text format, but also through audio recordings and video sessions.

As Reuters has noted, the layoffs come after several high-profile departures from xAI, including the company’s chief financial officer Mike Liberatore. The company launched Grok 4 in July, calling it the “smartest AI in the world.” Elon Musk claimed during the model’s reveal that if you make Grok 4 take the SATs and the GREs, it would get near perfect results every time and can answer questions it’s never seen before. He also proclaimed that Grok is going to invent new tech maybe later this year, and that he would be shocked if it doesn’t happen next year.