AI Firm Scale AI Cuts 140 Jobs Amid Economic Turmoil 

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While everybody thought that AI was shielded from the layoff wave of big techs, San Francisco–based data labelling service provider Scale AI debunked the myth by firing 20% of its 700-employee company. 

CEO Alexandr Wang of the $7.3-billion value company said that the job cut is done to overcome “macroeconomic challenges”. It is startling to find that an AI firm is laying people off at a time when the sector is growing rapidly. Case in point: Microsoft recently announced that it is investing a whopping $10 million in OpenAI while AI platforms like Jasper and Stability AI raised $125 million and $101 million, respectively.

Meanwhile, the affected employees will get at least eight weeks of severance pay and three months of medical benefits. The company will waive the one-year equity cliff for staff with less than a year of service and back immigrants with work visas. 

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Although the company claimed that it saw major sales growth in 2021 and 2022, which led them to hire more people, they were unaware that many of the industries it served, including e-commerce and consumer technology, were dealing with the pandemic’s consequences and adjusting to the new normal of the market. The Tiger Global-backed company, Scale AI, is also reducing costs, changing its hiring stretegy, and evaluating new offices.

Meanwhile, crypto trading company Coinbase recently disclosed that it would let go of 950 employees and cut operating costs by 25% to reduce expenditure. Nine months ago, Coinbase laid off 18% of its workforce, or roughly 1,100 individuals, in anticipation of an impending US recession.


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AI layoffs 

In the first week of 2023, Twitter fired 40 of its data scientists from the AI team as ad revenue dropped, in its third round of layoffs since 2022. Meta also laid off a 50-person ML team in November last year. Autonomous vehicle technology startup Argo AI let go of 173 staff in October and eventually shut down. Israeli predictive analytics software firm Pecan AI also fired 25% of its 120 employees some time ago.


An AIM Research report stated that in 2022, AI-generated revenues were estimated to be around $12.3 billion, with the BFSI industry with the highest adoption rate at 65%. In addition, it is predicted that AI and cloud infrastructure will have the largest growth in investment priorities in 2022.

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Shritama Saha
Shritama is a technology journalist who is keen to learn about artificial intelligence and data analytics. A graduate in mass communication, she is passionate to explore the influence of AI on fashion, media, and art.

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