Elon Musk's xAI lays off 500 employees from data annotation team

Elon Musk's artificial intelligence startup xAI has laid off 500 employees, according to internal emails reviewed by Business Insider.

The cuts, announced on Friday night, represent a sweeping "strategic pivot" within the company's operations.

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In the internal message, xAI said it will accelerate the expansion of specialist AI tutors while scaling back 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," the note reportedly stated.

The layoffs affect around one-third of xAI's 1,500-member data annotation team, the group responsible for labelling and preparing training data for the company's chatbot Grok.

Responding to requests for comment, xAI pointed to a statement on X, the Musk-owned social network it acquired earlier this year.

"We will immediately surge our Specialist AI tutor team by 10x," the company said, adding that it is actively hiring across field such as STEM, finance, medicine, safety, and more.

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