Elon Musk’s xAI cuts 500 jobs in Grok shake-up, plans to hire 10X specialist AI tutors

Dubai: Elon Musk’s xAI has laid off at least 500 employees from its data annotation team, which trains the company’s Grok chatbot, Business Insider reported on Friday.

The company informed staff by email late Friday night that it was downsising its team of generalist AI tutors.

What xAI said about the layoffs

In response to queries, xAI pointed to a post on X saying it plans to increase its specialist AI tutor team by “10X.”

The internal email cited by Business Insider stated: “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… As part of this shift in focus, we no longer need most generalist AI tutor positions and your employment with xAI will conclude.”

Largest team at xAI hit hardest

The annotation team—xAI’s biggest—helps Grok understand the world by categorising raw data.

Screenshots showed that a Slack channel used by annotators dropped from 1,500 members to just over 1,000 as layoffs rolled out.

Workers were told they would be paid until the end of their contracts or November 30, but their system access was cut immediately.

Senior exits add to turbulence

The reorganisation follows the departure of several senior staff. Finance chief Mike Liberatore left in July after just months in the role.

In recent weeks, senior-level employees, including the annotation team’s former head, also had their Slack accounts deactivated.

Staff tested for new roles

Ahead of the layoffs, employees were told to sit for tests that would determine their future at xAI.
The tests, led by new team leader Diego Pasini, spanned STEM, coding, finance, medicine, as well as Grok’s “personality,” “red teaming,” and content safety.

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

Musk’s AI push

Musk founded xAI in 2023 to rival Big Tech’s AI leaders, whom he has accused of censorship and weak safety standards. Despite the cuts, xAI maintains it is hiring and expanding its specialist AI tutor division.