Scale AI is to cut 14pc of its workforce and stop work with 500 contractors, following Meta’s $14.3bn investment in June, after rumours of poor work practices abounded.
At first glance, the news of Scale AI cutting 500 contractors and around 200 staff after a $14.3bn investment from Meta might look like another rationalisation headline, but anyone following the rumours that have swirled around work practices at the nine-year-old startup which provides specialised data to train AI and evaluates models and applications, will be unsurprised by the so-called restructuring.
“After reviewing our company and its operations, I’ve made the decision to restructure several parts of the GenAI organisation,” interim CEO Jason Droege said in a memo to staff yesterday seen by Business Insider. “I believe these changes will best position us for the long-term, make the org more efficient, and allow GenAI to focus on the biggest and most profitable opportunities. As a result of this restructuring, some members of this org will be leaving Scale today.”
An exclusive by Inc. in June had unearthed shoddy practices and claims that many independent contractors were basically ‘spammers’ feeding poor, inaccurate data into its AI used for its biggest client Google. While Scale AI spokesperson Joe Osborne said at the time that “this story is filled with so many inaccuracies”, the rumours continued to swirl about poor work and data quality monitoring inside that AI start-up.
Scale AI of course lost Google as a customer, after Meta became 49pc owner, but Inc. claimed that there had been “lapses in security protocols” and “spam” problems in the work done for the search giant for nearly a year. There appeared to have been a particular issue with remote contractors.
The huge investment by Meta – part of a drive to up its game in AI – valued Scale at more than $29bn, making it Meta’s second-largest, following the more than $20bn acquisition of WhatsApp back in 2014. It has led many commentators to speculate it may have overpaid, in the rush to compete in the AI race.
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