One of the leading companies in the field of data labeling for artificial intelligence, Scale AI, has announced a major restructuring, which will involve laying off 200 full-time employees, accounting for about 14% of the staff, as well as terminating collaboration with 500 contractors.
This is reported by Business • Media
Reasons for Layoffs and New Company Priorities
Interim CEO of Scale AI, Jason Droge, stated that the data labeling division had expanded too quickly, resulting in excessive hierarchy, increased bureaucracy, and confusion in task distribution. Against the backdrop of declining demand from major clients, the company is forced to reallocate resources and strengthen teams working on corporate and government projects, as well as developing customized AI solutions.
“Scale now plans to reallocate resources by bolstering teams focused on corporate and government projects, as well as developing specialized AI solutions.”
Impact of the Deal with Meta and Further Market Changes
The mass layoffs occurred after Meta acquired 49% of Scale AI’s shares for $14.3 billion in June 2025. At the same time, Scale AI’s CEO, Alexander Wang, moved to Meta to establish a new department focused on developing superintelligence. Following this deal, some key clients, including OpenAI and Google, began to withdraw from collaboration with Scale AI, which affected the demand dynamics and the company’s market position.
Despite its industry leadership and revenue of $870 million in 2024, Scale AI faces competition from companies such as Turing, Labelbox, and Invisible Technologies. These companies are already seeing increased interest from former Scale clients who are concerned about Meta’s influence on the business.
Scale AI is focusing on the most profitable areas, including code annotation, language processing, and audio data processing. The company is also expanding its collaboration with U.S. government agencies, including the Department of Defense, as well as with governmental structures in other countries. In the second half of 2025, it plans to hire hundreds of new employees as part of its strategy to strengthen its position in priority segments.
Jason Droge emphasized that Scale AI has sufficient financial and human resources to invest in further development and adaptation to new market conditions. He expressed confidence that the restructuring will restore client trust, enhance process efficiency, and ensure the company’s long-term stability in the AI services market.
It was previously reported that Mark Zuckerberg, head of Meta, announced a major overhaul of the company’s AI divisions and the launch of the Meta Superintelligence Labs (MSL) research group.