Scale AI, the data-labeling provider backed by Meta’s recent USD 14.3 billion investment, has cut approximately 200 full-time roles, about 14% of its global workforce, and ended contracts with 500 external contractors, Bloomberg reported.
Interim CEO Jason Droege stated that the move was necessary to “streamline our data business to help us move faster,” citing an overly rapid expansion of its generative-AI division that led to “too many layers, excessive bureaucracy, and unhelpful confusion about the team’s mission.
”Droege noted that shifts in market demand contributed to the decision, as some marquee clients, such as OpenAI and Google, have scaled back engagements following Scale’s deepening ties with Meta and the departure of co-founder Alexandr Wang to lead Meta’s Superintelligence unit.
Despite the downsizing, Droege emphasized that Scale remains “well-resourced” and plans to redirect hiring toward enterprise sales, government partnerships, and international markets later in 2025.
Founded in 2016 to provide labels and annotations essential for training AI models, Scale AI generated an estimated USD 870 million in revenue last year and projected USD 2 billion for 2025, driven by the surge in demand for high-quality labeled data. However, the company now faces intensifying competition from rivals such as Turing, Invisible Technologies, and Labelbox, many of which have reported influxes of new business from clients wary of Meta’s 49% stake.
In an internal memo, Droege outlined a plan to reorganize the data-labeling arm into five strategic pods focused on coding, language, and audio projects, while consolidating go-to-market efforts under a unified demand-generation team. Affected employees will receive severance packages, and the company will hold town-hall meetings this week to detail the new structure and long-term vision.
As the AI industry evolves, Scale’s restructuring highlights the challenges of balancing rapid growth with operational discipline and the broader impact of strategic partnerships on a neutral data-supply chain. With its core business reset, Scale aims to sharpen its focus on the most profitable opportunities and reclaim momentum with its existing client base.
