Press Release

AI Startup Stability Lays Off 10% Of Staff Members

The artificial intelligence startup Stability is terminating staff members following the departure of its former CEO, Emad Mostaque. 

TakeAway Points:

  • According to an internal memo that CNBC was able to get, Stability AI “right-sized” the company after experiencing unsustainable expansion, which resulted in the layoff of over twenty people.
  • The co-CEOs of the AI startup, Christian Laforte and Shan Shan Wong, informed staff members that the company will need to “say goodbye to some colleagues in order to restructure sections of the business.”
  • Stability AI employs roughly 200 individuals worldwide, and publicly available data on the company’s personnel indicates that layoffs account for 10% of that number.

Stability to Layoff staff

Stability—the company that created the well-known Stable Diffusion broad language model—made more than twenty of its employees redundant in an effort to “right-size” the business after an unsustainable phase of expansion, according to an internal memo reported by CNBC.

The company said Wednesday night that its recently appointed co-CEOs, Christian Laforte and Shan Shan Wong, stated that the organisation needed to “restructure portions of the business, which will regretfully mean saying goodbye to some colleagues.”

“Those who are 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.

10% of 200 Individuals to be Laid Off

Stability AI employs roughly 200 individuals worldwide, and publicly available data on the company’s personnel indicates that layoffs account for 10% of that number.

The majority of the impacted employees work in the company’s operations, and they have been informed of their redundancy, according to a person with knowledge of the situation who spoke with CNBC on condition of anonymity because they were unable to discuss the issue in public.

Wong and Laforte will succeed Mostaque, the outgoing CEO of Stability, who is departing to “pursue decentralised AI,” the business stated last month.

Mostaque Alleged False Claims

Mostaque left after allegations in the media cast doubt on his qualifications.

According to a June 2023 Forbes report, Mostaque misled a number of people, including his own investors, about having a master’s degree from Oxford University and the nature of his partnership with Amazon, which Stability had described as a strategic agreement but was really just a regular cloud computing leasing agreement.

At the time, Mostaque responded by calling several of Forbes’ claims “false accusations and misrepresentations.” He said that because he opted to obtain his degrees by mail rather than attending the graduation ceremony, he never received his Oxford University degree.

He also emphasised the agreement with Amazon and its cloud computing division, Amazon Web Services, calling it a “strategic commercial collaboration” in which AWS constructed a “remarkably rare dedicated compute cluster” that satisfies Stability’s needs.

Meanwhile, Stability AI is currently looking for a long-term CEO to take on the position of chief executive officer. Although it only recently revealed developer APIs, or application programming interfaces, for its Stable Diffusion 3 AI model, the business stated it is still operating normally and developing new products.

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