xAI Cuts 500 Data Jobs in Shift to ‘Specialist’ Tutors

Elon Musk’s xAI has cut approximately 500 workers from its data annotation team—nearly a third of the division—in a sudden pivot toward specialized training for its Grok chatbot, according to a report from Reuters.

Key Facts

• The Cut: Roughly 500 data annotators were let go, reducing the 1,500-person team by about 33%.
• The Reason: The company is ending “generalist” data labeling to focus on “specialist” trainers in fields like math, law, and coding.
• The Severance: Workers will be paid through the end of their contracts or November 30, whichever comes first.
• Source: Reuters, Business Standard

The Pivot to ‘Smart’ Data

The layoffs mark a major change in how xAI builds its Grok model. Until now, the company used a large team of “generalist” annotators to label basic data. Now, leadership wants to replace them with experts. An internal email stated the company will “accelerate the expansion” of specialist tutors who know specific subjects like STEM, finance, and medicine.

The goal is to make Grok smarter in technical fields. While general labeling jobs are being cut, xAI claims it plans to grow its specialist team by ten times. The move mirrors a wider trend where AI companies are moving away from simple data labeling toward high-level expert feedback.

Sudden Lockouts and Tests

The cuts happened fast. Staff were notified by email on Friday night and immediately lost access to company systems. Just days before the layoffs, the company asked workers to take tests to see if they fit into new specialist roles. These tests covered topics ranging from coding to understanding internet culture.

The reorganization is reportedly led by Diego Pasini, a new team leader. The remaining team members will focus on complex tasks, leaving the basic annotation work behind as the company tries to catch up to rivals like OpenAI and Google.