Palo Alto, September 13: Elon Musk's xAI has laid off 500 employees as part of restructuring. The xAI layoffs have hit Grok's data annotation members. As per a report, the AI company plans to hire 10x specialist AI tutors in the future. xAI aims to replace the generalist roles in the near future as a part of a strategic shift.

As per a report by Business Insider, Elon Musk's xAI will conduct tests to assess the strengths of the workers and determine the future roles required for operations. The latest round of xAI layoffs was implemented on September 12, 2025 (Friday) by the company, resulting in a workforce reduction. Salesforce Layoffs: CEO Marc Benioff Reveals Company Laid Off Around 4,000 Employees Amid Implementation of AI at Workplace, Says ‘8 of the Most Exciting Months of My Career’

xAI Layoffs: Key Details and Impact on Employees

Elon Musk's xAI announced the layoffs via email to the employees. The company said it decided to increase the expansion and prioritise hiring 10x AI tutors and scale back the focus on general AI tutor roles. xAI said, "After a thorough review of our Human Data efforts, we've decided to accelerate the expansion and prioritization of our specialist AI tutors, while scaling back our focus on general AI tutor roles."

As per the report, Elon Musk's artificial intelligence company said that the strategic pivot was to take effect immediately and amid shifting focus, it would not require generalist AI tutor positions. The affected employees will be paid by the end of their contract on November 30, 2025. However, the company said that these generalist AI tutors will stop having access to the xAI systems on the day they receive their layoff notice. Oracle Layoffs: US-Based Software Giant Lays Off 100 Employees in India Amid Ongoing Restructuring; Know Why

Grok's data annotation team was behind the major development of the AI chatbot. The team reportedly taught Grok to help understand the world by "contextualising and caterogising" raw data. On Friday afternoon, the main Slack room that the data annotators used had over 1,500 members, as per the BI. However, after the announcement of xAI layoffs, the number of people left in the team was slightly above 1,000. The report mentioned that the numbers continued to decline.  

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