Elon Musk’s xAI Lays Off at Least 500 Staff While Posting New Job Openings

xAI, the artificial intelligence start-up founded by tech billionaire Elon Musk, has reportedly laid off at least 500 employees last week. At the same time, the Grok chatbot maker has been posting job openings on its page on the social media platform X.

According to a report by Business Insider, xAI sent an email to employees informing them it would be downsizing its team of generalist AI tutors. The role involves making complex AI decisions understandable and accessible across subjects and industries.

As per the email cited by the portal, workers were told they would be paid through the end of their contracts or until 30 November, but their access to company systems was cut off immediately upon receiving layoff notices. The company’s data annotation team, the largest within xAI, has been central to training Grok by categorising and contextualising raw data.

The layoffs followed a series of leadership changes, including the deactivation of Slack accounts belonging to several senior employees. Last week, workers were reportedly called into one-on-one meetings to review their responsibilities and projects, and some were asked to highlight colleagues’ contributions. On Thursday night, staff were told to prepare for a reorganisation of the annotation team.

On Friday afternoon, the main Slack channel for annotators had more than 1,500 members. By the evening, screenshots showed that number had fallen to just over 1,000, continuing to drop as the layoffs progressed.

A company-wide announcement instructed some employees to pause their current work and complete a series of tests by Friday morning to determine future roles. The assessments spanned subjects such as STEM, coding, finance, and medicine, as well as Grok-specific areas like “personality and model behaviour” and “shitposters and doomscrollers.” Other tests focused on safety tasks, including red-teaming the chatbot, along with audio and video annotation.

The directive reportedly came from Diego Pasini, who workers said recently became team leader. xAI explained that the tests were designed for both supervisors and generalist tutors, who handle a wide range of tasks from coding and finance to video and writing. Some assessments were conducted on CodeSignal, while others used Google Forms. According to the report, more than 200 workers acknowledged the message with a green check-mark emoji, though over 100 followed up with questions and concerns.

That same evening, xAI announced on X that it plans to expand its team of specialist AI tutors “by 10x,” hiring across domains such as STEM, finance, medicine, and safety.