Musk Fired 500 Workers by Email After They Built His AI

On Friday night, more than 500 employees at Elon Musk’s AI startup xAI got the same cold message in their inbox: you’re done. No calls. No meetings. Just an email and instant lockout from company systems.

This was not a handful of contractors. It was xAI’s largest workforce, the annotators and “generalist AI tutors” who trained Grok, Musk’s chatbot, to read, learn, and make sense of the world.

xAI told workers the mass layoff was part of a “strategic pivot.” Translation: generalists are out, and Musk only wants “specialist” AI tutors in areas like medicine, finance, and safety.

The email promised pay through November, but accounts were disabled immediately. Slack groups that once had over 1,500 members reportedly dropped to about 1,000 in hours.

Meanwhile, on X (formerly Twitter), xAI tried to spin the bloodbath as growth by claiming it would “10x” its specialist tutor team.

These were the people who literally gave Grok its brain. Without annotators contextualizing and labeling raw data, the chatbot would not exist. Yet when efficiency and cost-cutting took center stage, the same humans became disposable.

One worker called the Friday night timing “pretty shady.” Minutes later, their Slack access vanished.

This was not the first shake-up. CFO Mike Liberatore walked out in July after only a few months. General Counsel Robert Keele, senior lawyer Raghu Rao, and even co-founder Igor Babuschkin also left earlier this year.

Now the exodus has hit the rank and file. The people without big titles, stock, or media profiles are the ones paying the price.

For many, this mass firing is a warning shot. AI companies will use you to build their bots and then replace you the second those bots no longer need you.

The message is brutal but clear: specialists stay, generalists go, and loyalty does not matter when the machines are ready.

But this is not just about Musk or xAI. It reflects a wider shift across tech.

If you’ve been job hunting lately, you’ve probably seen the same disturbing pattern: so-called entry-level roles now demand two to five years of experience, advanced AI skills, and a proven track record. For new grads and career switchers, the door feels bolted shut.

That is why understanding these changes is critical. If you are struggling to break into tech, our breakdown will help you see what is happening and how to play the new game.