Massive Layoffs Shake Up xAI
If there’s one thing Elon Musk has a reputation for, it’s making bold (and often abrupt) moves when it comes to running his companies. This time, his approach to trimming headcount at xAI, the offshoot of X focused on developing the Grok artificial intelligence, has raised more than a few eyebrows. According to Business Insider, the beginning of September saw over 500 xAI employees let go in a single sweep. Most of those dismissed were data annotators—the people tasked with “teaching” Grok how to understand the world. Some were even senior staff, whose access was simply revoked overnight.
“After a thorough review of our human data activities, we have decided to accelerate the expansion and prioritization of our specialized AI tutors, while reducing attention given to generalist AI tutor roles. This strategic shift is effective immediately. As part of this refocus, most generalist AI tutor positions are no longer needed, and your employment with xAI will end.”
This was the email that landed in hundreds of inboxes, spelling the end for a large part of the annotation team.
A Boldly Unorthodox Promotion
Reshuffling such a huge team—down to about 1,000 employees by mid-September—meant someone new had to take charge. Enter Diego Pasini, a 20-year-old who graduated high school in 2023. Up until recently, he was a student at the University of Pennsylvania. But after winning an xAI-sponsored hackathon in January, he made a rapid leap: straight into the company, and now straight to the top of its data annotation team. Not your usual corporate ladder.
Pasini now leads both full-time staff and contractors overseeing how Grok learns. In his first days as head of annotation, he called an all-hands meeting to reassure remaining employees that layoffs were over for now. However, in reality, a further 100 people were thanked for their efforts in the week of September 15, bringing the total workforce down to 900.
New Boss, New Methods—And a Ripple of Anxiety
Added to the surprise of Pasini’s appointment was his immediate announcement that every employee would face one-on-one reviews. Each person would need to present their work and justify their value to xAI. Unsurprisingly, this move—according to employees interviewed by Business Insider—created a “climate of panic” throughout the team.
The Musk Meritocracy: Promises and Pitfalls
Elon Musk has long promoted what he calls a “meritocratic” company culture, where skills matter more than tenure or age. Appointing Pasini fits this philosophy perfectly. In fact, it’s not the first time Musk has entrusted key roles to young talents: he previously placed Luke Farritor, then just 24, in an important government efficiency post.
xAI’s team includes several employees aged between 19 and 24, specifically recruited by Musk. Yet this strategy isn’t universally popular. As often happens at Musk-run companies, employees who raised objections weren’t encouraged to share their views with the world. In fact, when two staffers criticized Pasini’s meteoric rise on the company’s Slack, their access was revoked within hours.
Welcome to xAI: where anything can happen—just not always what you expected.
John is a curious mind who loves to write about diverse topics. Passionate about sharing his thoughts and perspectives, he enjoys sparking conversations and encouraging discovery. For him, every subject is an invitation to discuss and learn.
