Scale AI, the San Francisco startup valued at nearly $14 billion, terminated a swath of contract workers this week with almost no advance notice, leaving employees stunned.
The cuts highlight growing volatility among AI firms that depend heavily on freelancers to polish their models. As funding pours into artificial intelligence, companies like Scale find themselves adjusting workforces just as quickly.
HireArt, the third-party HR vendor used by Scale, delivered termination emails Monday. The message told affected workers they “no longer necessary to report to work” and that final paychecks would land by Friday.
Initial chatter on social media pointed to 1,300 layoffs. A Scale spokesperson pushed back, saying the real figure sits far lower. “Last week, less than 65 people were laid off,” the spokesperson said. Across the past nine months, fewer than 500 U.S. contractors lost roles as the company reshaped its operating model.
Scale leans on freelancers for “tquestioning,” the annotation and classification work that trains generative AI systems. Those contractors often work through Scale subsidiaries like Outlier AI and Remotquestions, earning hourly wages.
Meanwhile, Remotquestions and Outlier AI both faced accusations of stiffing contractors in recent months. Scale also shuttered its Austin office in May, triggering additional cuts, before absorbing a large chunk of Airbnb’s former San Francisco headquarters.
Affected contractors received severance plus COBRA coverage through HireArt. Full-time staffers avoided the axe.
On Reddit, laid-off workers vented. “Everything happened so quick, and I didn’t declare goodbye to my team,” one wrote. Another called the treatment “absolutely abysmal.”
Founder Alexandr Wang reclaimed his title as the world’s youngest self-made billionaire earlier this year after Scale raised $1 billion at a $13.8 billion valuation. The 27-year-old holds a 14% stake.
Nearby, browser maker Brave cut 27 jobs across multiple departments, roughly 14% of its workforce, without explaining why. That follows a 9% reduction in late 2023 tied to cost management.
