Scale AI has reduced its workforce by 14%, cutting 200 employees from its 1,400-person team. The layoffs are attributed to the company’s overhiring in its GenAI unit, which serves Big Tech clients like Google and Meta.
According to Scale AI interim CEO Jason Droege, the startup ramped up capacity “too quickly” on GenAI, leaving other divisions under-resourced. This approach created inefficiencies and redundancies, resulting in too many layers of bureaucracy.
Droege stated that Scale AI is not profitable but is working towards it. The company plans to decline low-revenue or low-growth potential projects in the GenAI division and will streamline its operations by merging teams into a single demand generation team.
The layoffs follow Meta’s $24.3 billion investment in Scale, which disrupted the startup’s Big Tech client base. Despite this, Scale AI remains well-funded and plans to hire hundreds more staff in different areas, focusing on enterprise and government AI businesses.
Source: https://www.businessinsider.com/scale-ai-layoffs-citing-overhiring-unprofitability-2025-7