More Layoffs at xAI (XAIQ) as Elon Musk Cleans House Ahead of IPO

Elon Musk has reportedly ordered a new wave of job cuts at xAI (XAIQ), with more co-founders pushed out amid his dissatisfaction with ​the underperformance of the startup’s coding division.

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This is the second round of layoffs in as many months after Musk ‌overhauled the management of xAI in February ahead of a planned initial public offering (IPO) of the company later this year. The xAI IPO is anticipated to be one of the largest ever, after merging the company with his rocket firm SpaceX.

According to media reports, Musk has ​bought in “fixers” from SpaceX and Tesla TSLA -0.26% ▼ to audit xAI and decide which employees to cut as he tried to make the AI incubator a leaner and more efficient operation. Consequently, Musk has ordered that several employees be terminated whose work was deemed to be insufficient.

Co-Founders Pushed Out

Co-founder Guodong Zhang, head of xAI’s Imagine team, told colleagues he was leaving ​after being blamed for issues with the coding product and relieved of his ​primary duties by Musk, the report said, citing two people familiar with the decision.
He confirmed his departure in a post on X on Thursday.
Zihang Dai, another co-founder, reportedly left xAI ​earlier this week. The exits leave the three-year-old AI company with only ​two of its 12 co-founders who helped Musk set up xAI in March 2023, according ‌to the ⁠report.
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SpaceX, which purchased xAI to create a $1.25 trillion company, did not immediately respond to a Reuters request for comment.
XAI staff have complained that the upheaval is damaging morale and standing in the way of it reaching full potential, ​the FT report said.
Researchers ​continue to leave ⁠because of burnout because of Musk’s “extremely hardcore” work demands or after receiving better offers from rivals.
Recruiters have been contacting ​candidates who had previously been rejected to extend job offers, ​often with ⁠improved financial terms, the report said.
“Many talented people over the past few years were declined an offer or even an interview at xAI. My apologies,” Musk said ⁠in ​an X post on Friday, adding that he ​will reach back out to promising candidates.
xAI bought in Andrew Milich and Jason Ginsberg from code-generation startup ​Cursor on Thursday.

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