Layoff news: Elon Musk-led artificial intelligence company xAI has laid off at least 500 employees from its data annotation team, which helps develop the Grok chatbot. The company plans to downsize its team of generalist AI tutors, reported the news portal Business Insider on Saturday, 13 September 2025.
According to the news report, these 500 employee job cuts will be effective immediately. The email was reportedly sent to the employees on the night of Friday, 12 September 2025.
“After a thorough review of our Human Data efforts, we’ve decided to accelerate the expansion and prioritisation of our specialist AI tutors, while scaling back our focus on general AI tutor roles. This strategic pivot will take effect immediately,” said the company in an official email, cited in the news portal’s report.
The company also disclosed that it no longer needs generalist AI tutor positions in the company, reportedly the reason behind these sudden job cuts in the artificial intelligence company.
“As part of this shift in focus, we no longer need most generalist AI tutor positions, and your employment with xAI will conclude,” they said, reported the news portal.
According to the news portal’s report, the employees being laid off were told that they would be paid until the end of their contract, 30 November 2025. However, their access to the company systems would be terminated as of the day of the layoff notice. ‘
The employees who are being laid off are from the largest team in xAI, who play a key role in developing Grok by teaching the AI chatbot how to understand the world by contextualising and categorising raw data.
As of Friday afternoon, the main Slack room used by the data annotators had more than 1,500 members, which dropped to a little over 1,000 as of the evening of the same day. The number of employees was continuing to decline over the course of the news report, reported the news portal.
Amid the job cuts, the Elon Musk-led AI company also announced that the firm is looking for “Specialist AI tutors” who would add huge value to the company.
In a social media post on the platform X, the company disclosed that the team plans to expand the Specialist AI tutors team by 10 times as they look to hire people across domains like STEM, finance, medicine, safety, etc.
“Specialist AI tutors at xAI are adding huge value. We will immediately surge our Specialist AI tutor team by 10x! We are hiring across domains like STEM, finance, medicine, safety, and many more. Come join us to help build truth-seeking AGI!” they said in the post on X.
The layoff notices were reportedly sent to the employees only a few days after several senior-level employees, including the team’s former head, recently had their Slack accounts deactivated, according to an earlier report from the news portal.
Before the layoffs, the company allegedly informed the workers to prepare for a reorganisation of the data annotation team, according to the news portal’s report on Saturday.