AI company Scale reduces workforce by 14% following Meta's acquisition of CEO
In a significant move, Meta has recruited Scale AI's CEO, Alexandr Wang, as part of a transaction valued at $14.3 billion last month. This acquisition marks a key role for Wang, who now leads Meta's Superintelligence team.
However, the acquisition has led to a wave of changes within Scale AI. The company has announced workforce reductions, affecting approximately 14% of its staff and numerous contractors. This includes the termination of 200 employees and the cessation of engagements with 500 global contractors.
The workforce reduction and strategic shift come after several of Scale AI's major data clientele have reportedly concluded their partnerships with the startup. The interim CEO, Jason Droege, communicated that the company had expanded its core data-labeling operations too rapidly.
Scale AI's core business revolves around providing artificial intelligence laboratories with labeled, structured data essential for training AI models. The company intends to increase staffing within its enterprise and government sales divisions, signaling a shift in operational focus.
Meta has substantially invested in Scale AI, a fact that seems to have played a role in the company's strategic shift. The news of this investment and the subsequent changes at Scale AI were obtained by Bloomberg.
Despite the changes, Scale AI continues to provide exclusive content on data, technology, and startups through its newsletter. Subscribing to this newsletter delivers content directly to your inbox. The featured image in this article is credited to Meta and Scale AI.
It appears that Scale AI is reorienting its operational focus from its initial business model that established its market presence. This move is part of a larger trend in the tech industry, where companies often evolve their strategies to adapt to changing market conditions and investor expectations.
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