Elon Musk’s artificial intelligence company, xAI, has laid off at least 500 employees from its data annotation team, according to a report by Business Insider. The team, which played a crucial role in training the company’s Grok chatbot by categorizing and contextualizing raw data, was the company’s largest workforce segment. Employees were informed of the layoffs through an email sent on Friday night, which explained that xAI was downsizing its group of generalist AI tutors.

While announcing the cuts, the company noted in a post on X that it was continuing to hire for a range of roles and planned to expand its specialist AI tutor team by tenfold. This suggests that while generalist positions are being reduced, xAI is shifting its focus toward developing a more specialized workforce.

Those impacted by the layoffs were told they would continue to be paid until either the end of their contracts or November 30, but their access to company systems would be terminated immediately after the announcement. The move marks a significant change for the company, which had been rapidly scaling up operations since its launch in 2023.

The layoffs follow another recent change in leadership. Mike Liberatore, xAI’s chief financial officer, left the company in late July after serving only a few months, according to the Wall Street Journal. Musk founded xAI with the goal of competing against major technology firms, often criticizing them for excessive censorship and weak safety practices in their AI development strategies.