Elon Musk’s xAI has laid off approximately 500 employees from its data-annotation team, the unit responsible for labeling and preparing data for training the Grok chatbot. The cuts, which represent about one-third of the 1,500-person team, were communicated via email on Friday evening, and their access to xAI’s systems had been cut off after they received the notice, and xAI says they will be paid their salaries until the end of their contracts on November 30.

In an internal note, xAI described the move as a “strategic pivot,” accelerating the prioritization of specialist AI tutors over generalist roles. xAI says it will immediately surge its Specialist AI tutor team by 10x, focusing on domains like STEM, finance, medicine, and safety. “We no longer need most generalist AI tutor positions,” the company wrote.

The layoffs come after several high-profile departures from xAI, including CFO Mike Liberatore, and follow the July launch of Grok 4, which the company called “the smartest AI in the world.”