Elon Musk’s artificial intelligence start-up xAI has laid off around 500 employees from its data annotation team, according to a Business Insider report on Friday. The team, the company’s largest, was responsible for training xAI’s Grok chatbot by categorising and contextualising raw data.

Employees were informed via email late Friday about the downsizing, with contracts to be honoured until November 30. However, access to company systems was cut off immediately, the report added.

In response to queries, xAI referred to a post on X where it said the company was “expanding specialist AI tutor hiring by 10X” even as generalist tutor roles were being reduced.

The move comes after the departure of Mike Liberatore, xAI’s chief financial officer, who left in July after just a few months in the role, as reported by the Wall Street Journal.

Musk founded xAI in 2023 with the aim of challenging Big Tech’s hold on artificial intelligence, often criticising rivals for “censorship” and “weak safety practices.”