xAI, the AI startup founded by Elon Musk, has cut about 500 jobs from its data annotation department—roughly a third of that team—triggering a major strategic pivot in how the company builds its Grok chatbot.
The affected workers were part of xAI’s generalist AI tutor workforce, whose role had been to label, categorize, and contextualize raw data to help Grok understand language, concepts, and real-world inputs. Employees were notified of the layoffs via email, told that their contracts would remain in force through November 30, but had their access to internal systems revoked immediately.
The move is part of xAI’s plan to shift away from general roles toward hiring more specialist AI tutors, with expertise in specific domains such as STEM, medicine, finance, behavior, and safety. xAI announced that it intends to expand its specialist-tutor team by tenfold, signaling a much narrower focus on high-skill roles that can contribute more directly to the performance and reliability of its AI models.
Before the layoffs, the annotation team was xAI’s largest, numbering around 1,500 people, including full-time and contract staff. With this reduction, xAI appears to be trimming what it sees as lower-value or lower-specialization roles in favor of those that bring domain knowledge or advanced skill.
Employees described the process as abrupt. Some were asked to stop their regular work and take domain-oriented tests (for example in coding or behavior) as part of deciding who would be moved into specialist roles. Others noted that leadership changes and deactivations of communication tools preceded the layoff notice. One impacted worker called the timing “pretty shady” because notifications arrived late on a Friday, catching many off guard.
xAI reportedly justified the layoffs by saying that the generalist tutor positions were no longer needed under the company’s evolving roadmap. Alongside letting go of generalist tutors, xAI reiterated it has job listings open in many specialist areas, and is pushing to fill roles in medicine, safety, finance, and STEM disciplines.
