Scale AI laid off 14% of its workforce, impacting 200 employees within its generative AI unit. Interim CEO Jason Droege stated that the company had overhired, resulting in inefficiencies and excessive bureaucracy. The startup is currently not profitable and is focusing on becoming profitable by eliminating low-revenue projects. Droege also mentioned that market demand shifts prompted a reassessment of their strategies, which will now streamline the GenAI division from 16 to five key areas, improving overall efficiency.
Droege wrote in the email that the company ramped up capacity "too quickly over the past year" on GenAI, leaving other divisions "under-resourced."
The email confirmed that Scale AI is not profitable, stating that the startup has an ongoing "drive towards profitability" by declining low-revenue GenAI projects.
Droege's email noted that market shifts required a re-examination of plans and a refinement of approach as part of restructuring.
As part of the restructuring, Scale AI will streamline its GenAI division from 16 "pods" down to five key areas and merge various teams into a single Demand Generation team.
Collection
[
|
...
]