NEED TO KNOW

  • Last month, three 22-year-old co-founders of a recruiting startup, Mercor, made history as the youngest self-made billionaires ever, according to Forbes

  • This week, the company allegedly ended an AI project that employed contractors before offering other work at a lower rate of pay, though Mercor has pushed back on what it calls “inaccurate” claims

  • The controversy has spilled into the press

Shortly after three 22-year-old co-founders were dubbed the world’s “youngest self-made billionaires,” their artificial intelligence recruiting startup, Mercor, allegedly shut down a project involving thousands of contractors — then offered to bring back workers at a lower hourly rate for a new project, Forbes and Business Insider reported, citing emails and reports from workers affected.

The company maintains this was just part of the normal course of business with temporary workers and the shifting needs of various projects and budgets.

The intent, Mercor has said, according to an email cited in Forbes and Business Insider, is “greater earning stability and consistent access to work.”

But some of those same workers are crying foul at the allegedly lowered pay, sparking a backlash that has spilled into the press while Mercor is pushing back against what it calls “inaccurate” claims.

It started on Tuesday, Nov. 11, when contractors with the company learned that a project they were working on had been canceled, five workers who requested anonymity told Forbes. The workers said to the outlet that the company confirmed the next day that the project was over.

“It was all very sudden. I have never seen anything like that and have worked on a few AI projects,” one contractor told the business magazine. 

For months, teams at Mercor had worked on the project that looked over video components for Instagram and Facebook, with an expectation set by managers that it would continue until December, workers claimed.

Some of the contractors also alleged that they had received fewer hours than promised and that there had been intermittent pauses with the project, Forbes reported. These workers were paid $21 an hour, according to the magazine.

Mercor acknowledged some of these issues, Forbes reported, citing an email sent amid the project’s cancellation that stated, in part, “We’ve carefully reviewed contributor feedback regarding task availability, hour caps, and workload consistency.”

The company promised that it would work on creating a “more stable” workspace going forward. 

According to Forbes, which again cited the email, Mercor offered to hire workers back for a new project, with more hours per week, but with an hourly rate of $16.

“While this reflects a change from the current structure, our goal is to offer greater earning stability and consistent access to work, rather than fluctuating opportunities,” Mercor wrote to contractors in the email reviewed by Forbes.

Some of the contractors took umbrage at this treatment.

“We are real people who deserve some notice, or warning or some consideration,” one of them told Forbes. “I know we are working with AI but we don’t work for AI. You don’t just dump thousands of people, that’s not just right.”

A contractor who agreed to work on the new project echoed that view to Business Insider.

“It sounds like most of us are in the same boat,” they said. “We wanted to boycott this, but are not in a financial place to do so. We needed to have the guaranteed income, even if it’s demoralizing.”

In a statement to PEOPLE, a Mercor spokesperson says that the company has been “transparent throughout the opportunity, and our role descriptions and onboarding materials clearly state that the work is temporary and project-based.” Mercor also told Forbes that the claims were “inaccurate.”

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CEO Brendan Foody emphasized that Mercor told workers that the project would be “temporary” in the job description, according to Forbes. 

The hiring platform offers a myriad of contracting jobs, with an average rate of $90 per hour, and hires experts, ranging from journalists, doctors and lawyers to video game specialists.

In late October, the three co-founders — Foody, board chairman Surya Midha and chief technology officer Adarsh Hiremath — made industry news when their company was valued at $10 billion following a funding influx of $350 million, Forbes previously reported.

That helped the trio, who went to the same California high school, make history as the youngest self-made billionaires ever, according to the outlet.

“It’s definitely crazy,” Foody told Forbes at the time. “It feels very surreal. Obviously beyond our wildest imaginations, insofar as anything that we could have anticipated two years ago.”