Emad Mostaque, founder and CEO of Stability AI, speaks at the Bloomberg Technology Summit in San Francisco, California, United States, Thursday, June 22, 2023.
David Paul Morris | Bloomberg | Getty Images
Troubled artificial intelligence startup Stability is laying off employees after the departure of its controversial former CEO Emad Mostaque.
Stability, which is behind the popular Stable Diffusion large-scale language model, has laid off more than 20 of its employees to “right-size” the company after a period of unsustainable growth, according to an internal memo obtained by CNBC.
The company’s new co-CEOs, Shan Shan Wong and Christian Laforte, told employees in an email Wednesday evening that the company needed to “restructure parts of the business, which unfortunately means saying goodbye to some colleagues “.
“Those affected by this have been informed individually and we will support them throughout this period,” Wong and Laforte, who were the company’s chief operating officer and chief technology officer, respectively, said in the memo. internal.
Stability AI’s layoffs represent about 10% of its global workforce, according to publicly available online data that shows the company employs about 200 people in total.
The employees affected by the measures are mostly on the operational side of the company and have been informed of their layoffs, according to a person familiar with the matter who spoke with CNBC on condition of anonymity because they were unable to speak. express publicly on the subject. .
Last month, Stability announced that its former CEO, Mostaque, was leaving the company to “pursue decentralized AI” and would be replaced by Wong and Laforte.
Mostaque’s departure follows media reports questioning his credentials.
A June 2023 Forbes report stated that Mostaque misled people, including his own investors, about obtaining a master’s degree from Oxford University, as well as the nature of a partnership with Amazon which Stability called a strategic deal but was nothing more than a standard cloud computing lease.
Mostaque’s response at the time was that several of Forbes’ allegations were “false accusations and misrepresentations.” He said he did not receive his degree from Oxford University because he did not attend the graduation ceremony but had arranged to receive his degrees through the job.
He also doubled down on the deal with Amazon and its Amazon Web Services cloud computing unit by describing it as a “strategic business alliance” that saw AWS build an “incredibly rare dedicated compute cluster” meeting stability requirements.
Stability AI is still looking for a permanent CEO to fill the top leadership position. The company said it continues to operate as normal and continues to launch new products, having recently announced development APIs, or application programming interfaces, for its Stable Diffusion 3 AI model.
You can read the full memo from co-CEOs Wong and Christian Laforte below:
Dear Team,
As you know, over the past few weeks the management team has been working hard on a strategic plan to reduce our cost base, strengthen support from our investors and partners, and enable our teams to continue to grow and launch innovative products.
Following a review of the global team, we have determined the need to restructure parts of the business, which will unfortunately involve saying goodbye to some colleagues. Those affected have been informed individually and we will support them throughout this period.
These decisions have not been taken lightly and are intended to right-size parts of the business and focus our operations, which is essential to putting us on a more sustainable path – and to putting us in the best possible position to continue to develop the cut. cutting-edge models and products. Products such as the Stable Diffusion 3 API reinforce our leadership in deep technology and demonstrate our unique systemic importance to the AI ecosystem.
We will meet as planned on Thursday for our regular town hall and we encourage you to ask any questions you may have to our leadership team in the form that will be sent out shortly. In the meantime, please feel free to discuss any concerns with your manager.
We would like to thank everyone for their dedication and contributions. We recognize the challenges we face, but we have a plan in place. Thanks to the hard work and commitment of this team, we are making progress every day, gradually moving in the right direction.
Best wishes,
Shan Shan and Christian
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