Elon Musk Fires AI Workers: What’s Happening?

At a time when artificial intelligence is being seen as the next big thing that could drive the globe, Elon Musk has done something unexpected as he fired a significant number of employees in his AI department.

Elon Musk’s artificial intelligence company xAI has carried out a major round of layoffs, cutting nearly 500 employees from its data annotation team, which was the company’s largest unit.

This team, known for the role of “generalist AI tutors,” was crucial in training Grok, xAI’s chatbot. Employees who were laid off will continue to receive pay until the end of their contracts or until November 30, but their access to company systems was removed immediately.

The decision marks a major shift in strategy. While the generalist tutor team has been almost completely wiped out, xAI has announced plans to expand its specialist AI tutor team by tenfold, suggesting a move toward more focused and skilled roles.

The company also stated that it continues to hire across various other positions, despite the cuts.

The timing of the layoffs follows the July exit of xAI’s Chief Financial Officer Mike Liberatore, who left the company after only a brief tenure.

Industry observers believe these changes indicate restructuring within xAI to streamline operations and reduce dependence on large-scale data labeling teams. Instead, Musk’s firm seems to be betting on specialist expertise and automation to drive the next phase of its AI development.