Snorkel AI, a $1.3 billion startup spun out of Stanford that connects artificial intelligence companies to human “experts,” laid off about 13% of its employees this week, it confirmed to Business Insider.
Snorkel AI is part of a boom in startups like Scale AI that help tech companies train their latest AI models, thanks in large part to human gig workers. Based in Silicon Valley, Snorkel announced it raised a $100 million Series D round this May at a $1.3 billion valuation and touts partners like Google and Anthropic on its website.
31 out of 240 employees were cut on Wednesday, Snorkel AI told Business Insider.
The startup attributed the cuts to a shift toward its “data-as-a-service” business, which has meant “deprioritizing some legacy areas of our business.”
“This, unfortunately, also means saying goodbye to some talented colleagues in these areas,” Snorkel AI said. “We are grateful for their contributions and are supporting them through this transition. These changes allow us to focus our energy on the areas where we can have the greatest impact and better serve the evolving needs of our customers.”
Snorkel AI publicly launched in 2020, promising to automate away the data labeling process, which can be expensive because it requires so much human labor. As AI labs race to release better models, they need more human expertise to review and refine datasets — a service that Snorkel AI offers.
The latest cuts appear to have avoided most AI-focused roles, the documents obtained by Business Insider show.
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Snorkel AI’s software engineering team was the hardest hit, with 13 of its employees terminated. In contrast, none of the company’s applied AI engineers or research scientists were let go. Overall, of the 25 people with “AI” in their job titles at Snorkel AI, only three were let go.
Some senior-level people were terminated as well, including Snorkel AI’s global head of business development and its director of AI solutions engineering.
It’s the latest major layoff to hit the highly competitive data labeling industry after Scale AI, one of the largest and best-known players, laid off 14% of its workforce and 500 contractors in July.
Scale AI’s layoff came after Meta bought 49% of the company and hired its CEO, triggering major customers like Google to leave. In an email explaining the decision, Scale AI blamed overhiring and market forces and also disclosed that it was unprofitable. Earlier this month, Scale AI terminated a dozen contractors on a key team tasked with probing AI models for potential harms.
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