Scale AI gets rid of 20% of its staff

Scale AI, a San Francisco firm that labels picture, text, voice, and video data for machine learning algorithms, laid off 20% of its staff this week.

Scale AI gets rid of 20% of its staff

Photo Credit: Getty Images

Rapid recruiting in 2021 and 2022 ran into macroeconomic obstacles, said creator and CEO Alexandr Wang. Scale AI’s employee count is unknown. In February 2022, the company reported having 450 employees.

Scale AI, estimated at $7.3 billion, is financed by Tiger Global, Coatue Management, and Founders Fund.

The 7-year-old startup began by providing autonomous vehicle companies with labeled data to train machine learning models for robotaxis, self-driving trucks, and warehousing and on-demand delivery bots.

In 2020, e-commerce, enterprise automation, government, insurance, real estate, and robotics industries resorted to Scale’s visual data labeling platform to build and use AI. The company now uses synthetic data to supplement real-world data. Customers include DOD, Pinterest, Nuro, Zoox, and GM.

Wang said businesses and governments are increasingly interested in AI.

“I decided to increase the team rapidly to take advantage of our new normal,” he stated. We saw considerable revenue growth in 2021 and 2022. We added staff in anticipation of continued expansion. I failed to forecast the macro environment’s rapid transformation in recent quarters. E-commerce and consumer technology, boosted by the epidemic, are now facing a market correction. We must prepare for a new economic climate.

Wang takes “all responsibility for our decisions”

Affected workers will receive 8 weeks of severance and 3 months of healthcare. The corporation waives the one-year equity cliff for employees with less than a year of experience and provides immigration support for individuals on work visas.

Wang said Scale AI is lowering costs, adjusting employment methods, and reassessing new offices.


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