In an attempt to combat global economic hardships and keep its business on the profitability track, San Francisco-headquartered Scale AI has decided to cut down employee bandwidth by 20 per cent. 

"Today, I have to announce the hardest change I’ve ever had to make at Scale. I have made the difficult decision to reduce the size of our team by 20%, which means saying goodbye to many talented Scaliens. If you are among those impacted, you will be contacted shortly with further details via your email as well as offered time for a 1:1 conversation with a manager today," Scale AI's CEO and founder Alexandr Wang wrote in a blog post.

"I take full responsibility for the decisions that have led us to this point. Over the past several years, interest from enterprises and governments in AI has grown rapidly. As a result, I decided to grow the team aggressively in order to take advantage of what I thought was our new normal. For a time, this seemed to prove out—we saw strong sales growth through 2021 and 2022. As a result, we increased headcount assuming the massive growth would continue. However, the macro environment has changed dramatically in recent quarters, which I failed to predict. Many industries we serve, such as e-commerce and consumer technology, have been buoyed by the pandemic and are now experiencing a painful market correction. As a result, we need to prepare ourselves for a very different economic environment," he added. 

The new year has not brought any good news for global tech employees. Instead, it has triggered more anxiety among them. Last year, the tech sector was hit brutally by the fear of recession and nearly 1,50,000 employees lost their jobs. Tech giants like Facebook, Twitter and Google were seen to reduce employee numbers as cost-cutting measures. Till now, this year has also not offered any difference. Prior to Scale AI, Amazon announced plans to fire 18,000 employees globally. Vimeo also announced plans to terminate 11 per cent of its workforce.