Data-annotation startup Scale AI has laid off hundreds of contract workers without prior notice, according to sources. The layoffs were communicated via email, with no official statement or additional context provided by the company.
While some former workers claim that around 1,300 people were affected, Scale AI’s director of operations, Xiaote Zhu, disputes this, stating that only 61 contractors were let go. The layoffs were handled by HireArt, the company’s HR vendor, which informed workers their employment was ending immediately.
Scale AI relies on contract workers to tag and label data for its AI programs. The company has faced criticism in the past for failing to pay contractors, and these recent layoffs follow a broader shift in business strategy. Despite promises of severance and COBRA coverage, many workers remain frustrated by the lack of communication and clarity from the company.
