Emad Mostaq, Founder and CEO of Stability AI, speaks at the Bloomberg Technology Summit on Thursday, June 22, 2023 in San Francisco, California, USA.
David Paul Morris | Bloomberg | Getty Images
Stability, the beleaguered artificial intelligence startup, is laying off employees following the controversial departure of former CEO Emad Mostaq.
Stability, the company behind the popular Stable Diffusion text-to-image model, is hiring 20 people to “rightsize” its business after a period of unsustainable growth, according to an internal memo obtained by CNBC. It is said that more than one employee was fired.
The company's newly appointed co-CEOs, Shan-Shang Wong and Christian Laforte, said in an email to employees Wednesday night that the company is “restructuring parts of its business. “There is a need to do so, and that will sadly mean saying goodbye to some colleagues.”
Wong and LaForte, who served as the company's chief operating officer (COO) and chief technology officer (CTO), respectively, said: “Those affected by this have been notified individually and we will continue to work with them throughout this period. “We will continue to support them,” the company said in an internal memo.
Stability AI's job cuts mean the company employs about 200 people in total, or about 10% of its global workforce, according to data published online.
Employees affected by the move primarily work in business operations and have been notified of layoffs, according to the people, who spoke to CNBC on condition of anonymity because they can't speak publicly about the issue. That's what it means. .
Last month, Stability announced that former CEO Mostak was leaving the company to “pursue decentralized AI,” and that he would be replaced by Wong and LaForte.
Mostak's resignation follows media reports that cast doubt on his qualifications.
According to a June 2023 Forbes report, Mr. Mostak was discouraging his investors about his master's degree from Oxford University and the nature of the partnership with Amazon, which Stability characterized as a strategic deal. that it was nothing more than a standard cloud computing lease. contract.
Mostak's response at the time was that some of Forbes' claims were “false accusations and false reporting.” He did not attend the graduation ceremony, but said he did not receive his Oxford University degree because he had arranged to receive it by post.
He also called the deal between Amazon and its cloud computing arm, Amazon Web Services, a “strategic business partnership” that will see AWS build “a very unusual purpose-built computing cluster” that meets stability requirements. He emphasized this agreement.
Stability AI is still searching for a permanent CEO to fill the top leadership role. The company, which recently announced a developer API, or application programming interface, for its Stable Diffusion 3 AI model, said it continues to operate as usual and continues to release new products.
The full memo from co-CEOs Wong and Christian Laforte can be read below.
Dear team,
As you know, over the past few weeks, our leadership team has focused on strategic planning to reduce our cost base, increase support with investors and partners, and enable our team to continue developing and releasing innovative products. I have been working hard.
After reviewing our global team, we have decided that we need to restructure parts of our business, which unfortunately means parting ways with some colleagues. Those affected by this have been notified individually and we will continue to support them throughout this period.
These decisions are not taken lightly and are aimed at right-sizing parts of the business and focusing on the business. This is important to take us in a more sustainable direction and put us in the best possible position to continue the development of cutting processes. Edge models and products. Products like the Stable Diffusion 3 API strengthen our deep technology leadership and demonstrate our unique systemic importance to the AI ecosystem.
We will meet as scheduled at City Hall on Thursday. If you have any questions, we encourage you to ask our leadership team in the form that will be submitted shortly. In the meantime, if you have any questions, please feel free to speak to your manager.
Thank you for your dedication and contribution. We recognize the challenges we face, but we have plans in place. Through the hard work and dedication of this team, we are making progress every day and moving steadily in the right direction.
I wish you good luck,
Shan Shan & Christian
