Month: October 2025

• Scale AI just cut an entire team of contractors focused on ‘generalist’ AI work in Dallas.
• The recently laid-off team members were then invited to work on Scale AI’s gig work platform.
• The startup attributed the cuts to an industry shift toward more expert-driven data labeling work.

Scale AI shuttered a team of contractors in its Dallas office on Monday, as it shifts towards more technical, expert-level training, the startup confirmed to Business Insider. The cuts mark the latest shake-up since Meta took a stake in Scale AI in a $14.3 billion deal.

The team, known internally as the NPO or New Projects Organization, had over a dozen members who focused on generalist tasks, such as improving the writing ability of artificial intelligence chatbots. That kind of work is in less demand in the fast-moving AI training industry as chatbots improve and require input from humans with skills in more niche fields, like medicine, robotics, and finance.

Based in San Francisco, Scale AI helps tech companies improve their latest chatbots by doing things like rewriting their responses. It’s part of a fast-moving AI training industry.

Scale AI offered the workers four weeks of severance pay and healthcare coverage through October, according to an email from HireArt, a staffing agency used extensively by Scale AI. The recently laid-off workers were also invited to join Scale’s gig-work platform, Outlier, where thousands of freelancers help train AI models.

“As you navigate this transition, we want to ensure you are aware of alternative opportunities,” the email read.

Scale AI spokesperson Natalia Montalvo confirmed the cuts to Business Insider.

“Scale wound down a small experimental onsite program in Dallas staffed by a contract workforce,” Montalvo said. “This reflects an industry shift toward higher skill, expert data work. It only affects a small fraction of our overall workforce and has no impact on customer delivery.”

The Scale AI spokesperson added that Scale AI continues to expand expert-level programs and that the recent shifts have not impacted Scale AI’s broader group of contractors that continue to work in Dallas.

xAI has also made similar moves to focus on specialized AI training, recently downsizing its team of generalist AI tutors in September.

The Meta deal, which was announced in June, caused some of Scale AI’s longtime customers, like Google and OpenAI, to abruptly halt their work. A few weeks later, Scale AI laid off 14% of its workforce — 200 employees and 500 contractors — citing overhiring and unspecified market forces in an internal email about the division.

Last month, Scale AI terminated twelve members of its Red Team, a key unit tasked with probing artificial intelligence models for harm. Scale AI attributed the cuts to performance issues, but two former Red Teamers disputed this, saying their team’s work had been drying up since the Meta deal.

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