Emad Mostaque, founder and CEO of Stability AI, speaks during the Bloomberg Technology Summit in San Francisco, California, US, on Thursday, June 22, 2023.
David Paul Morris | Bloomberg | Getty Images
Beleaguered AI startup Stability lays off employees after departure of controversial former CEO Emad Mostaque.
Stability, which is behind the popular text-to-image Stable Diffusion model, is laying off more than 20 employees to “right-size” the business after a period of unsustainable growth, according to an internal memo obtained by CNBC.
The company’s newly appointed co-CEOs Shan Shan Wong and Christian Laforte told employees in an email Wednesday night that the company had to “restructure parts of the business, which will unfortunately mean saying goodbye to some colleagues.”
“Those affected by this have been notified individually and we will be supporting them throughout this period,” Wong and Laforte, who were previously chief operating officer and chief technology officer at the company, respectively, said in the internal memo.
The layoffs at Stability AI amount to about 10 percent of its global workforce, according to publicly available online data that shows the company employs about 200 people in total.
Employees affected by the measures are mostly on the operations side of the business and have been told of their layoffs, according to a person familiar with the matter who spoke to CNBC on condition of anonymity because they could not speak publicly about the theme. .
Last month, Stability announced that its former CEO, Mosaque, was leaving the company to “pursue decentralized artificial intelligence” and would be replaced by Wong and Laforte.
Mosaque’s departure follows media reports questioning his credentials.
ONE Forbes June 2023 Report said Mostaque misled people, including his own investors, about receiving a master’s degree from Oxford University, as well as the nature of a partnership with Amazon which Stability described as a strategic agreement but was nothing more than a typical cloud computing lease.
Mostaque’s response at the time was that several of Forbes’ claims were “false accusations and misrepresentations.” He said he did not receive his degree from Oxford University because he did not attend his graduation ceremony, but had arranged to receive his degrees by post.
He also doubled down on the deal with Amazon and its Amazon Web Services cloud computing unit, describing it as a “strategic business alliance” that saw AWS build an “incredibly rare dedicated computing cluster” completed to Stability’s requirements.
Stability AI is still looking for a permanent CEO to take on the top leadership role. The company he said it’s still up and running and still releasing new products, having just recently announced developer APIs or APIs 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 two weeks the Leadership team has been working hard on a strategic plan to reduce our cost base, strengthen support with our investors and partners, and enable our teams to continue to develop and roll out innovation. products.
Following a review of the global team, we have identified the need to restructure parts of the business, which will unfortunately mean saying goodbye to some colleagues. Those affected by this have been notified 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 critical to putting us on a more sustainable path – and putting us in the best possible position to continue to we develop cutting-edge models and products. Products like the Stable Diffusion 3 API reinforce our leadership in technology depth and demonstrate our unique, systemic importance to the AI ecosystem.
We will meet as scheduled on Thursday for our regular town hall, and we encourage you to ask any questions you may have about our Leadership team on the form that will be sent out soon. In the meantime, feel free to discuss any concerns with your supervisor.
We would like to thank everyone for their dedication and contribution. We recognize the challenges we face, but we have a plan in place. Through the hard work and commitment of this team, we are making progress every day, steadily moving us in the right direction.
My best wishes,
Shan Shan & Christian