Scale AI is laying off 200 employees, representing about 14% of its staff, Bloomberg reported on Wednesday. The company is also ending contracts with 500 of its global contractors.

The announcement comes just a month after Meta hired Scale AI’s CEO in a $14.3 billion deal.

Most of the affected roles are in Scale AI’s core data-labeling business. The company has been known for supplying labeled and structured data to train artificial intelligence models.

In a memo obtained by Bloomberg, interim CEO Jason Droege said Scale AI had scaled this part of its business too quickly.

According to the memo, Droege told employees that Scale AI will now focus on expanding its enterprise and government sales units.

Following Meta’s investment, several of Scale AI’s largest data customers have cut ties with the company.

Bloomberg noted that, like other AI startups such as Inflection that have undergone reverse acqui-hires, Scale AI appears to be pivoting away from its original business model.

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This article was created with AI assistance.