Elon Musk’s xAI Lays Off 500 Staff in Major Restructuring of Grok Training Team
Elon Musk’s artificial intelligence company, xAI, has carried out a sweeping overnight restructuring of its data annotation division, resulting in the layoff of about 500 employees. The affected team had been instrumental in training Grok, xAI’s chatbot competitor to OpenAI’s ChatGPT.
According to an internal email obtained by Business Insider, xAI announced plans to shift focus from generalist annotators to “specialist AI tutors” with expertise in fields such as STEM, coding, finance, law, and media. The company stated that most general tutoring positions would be eliminated immediately, with employees losing system access on the same day they were notified. However, xAI pledged to honor employment contracts through November 30 or their previously agreed end dates.
The layoffs represent a significant downsizing of xAI’s largest workforce, which once numbered more than 1,500 annotators. These workers play a vital role in providing structured training data that helps Grok understand and generate accurate, context-aware responses.
By Friday evening, the Slack channel for annotators had dropped to just over 1,000 members and continued to decline. An xAI spokesperson referred to a post on X where the company confirmed it would expand its specialist tutor team tenfold, signaling an ongoing hiring push for experts in specific domains.
The restructuring followed a chaotic week for the annotation unit, marked by sudden management shakeups. Several senior managers, including the former team head, were abruptly locked out of their accounts earlier in the week. Staff members were then called into one-on-one review sessions, followed by instructions to complete a series of assessments overnight, ranging from science and finance to Grok’s safety protocols, chatbot personality, and internet culture behavior. Some tests were hosted on CodeSignal, while others were administered via Google Forms.
The abrupt timing sparked anger among employees.
“Doing this after people have gone home for the day is pretty shady,” one worker reportedly wrote in Slack before being removed from the channel.
Oversight of the annotation team now falls to Diego Pasini, who joined xAI in January. Pasini has not commented publicly on the layoffs or clarified how many of the dismissed workers will be replaced by new specialist hires.
The move underscores Musk’s broader vision of building a highly skilled, domain-focused workforce to develop Grok, as competition in the AI chatbot space intensifies.
