AI startup Mercor cuts 5,000+ contractors as projects shift
Mercor, a $10 billion AI training company working with Meta and OpenAI, just ended contracts with over 5,000 contract data labelers after wrapping up its Musen project.
The remaining workers are being offered similar jobs on a new Nova project—but at $16 an hour instead of the previous $21.
Why the layoffs?
Mercor says "project scope changes" are behind the move and reminds everyone these roles were always temporary.
This isn't just a Mercor thing—other AI companies like Scale AI and xAI have also been cutting contractor pay and jobs lately.
Fun fact: Big paydays for some
At its busiest, Mercor paid out more than $1.5 million daily to contractors—some specialists even made up to $200 an hour.
The company was founded by three Thiel Fellows and often hires ex-bankers, consultants, and lawyers to help train its AI models.
Despite all that spending, they're still profitable thanks to premium rates from top AI labs needing quality data.