Stability AI, the company behind the popular text-to-image model Stable Diffusion, has laid off approximately 10% of its workforce as part of a restructuring effort following the departure of its controversial former CEO, Emad Mostaque. The layoffs, which affected more than 20 employees, were announced in an internal memo obtained by CNBC.
In the memo, newly appointed co-CEOs Shan Shan Wong and Christian Laforte acknowledged the need to "right-size" the business after a period of unsustainable growth. "Following a review of the global team, we have determined the need to restructure parts of the business, which will sadly mean saying goodbye to some colleagues," they wrote. "These decisions have not been taken lightly and they are intended to right-size parts of the business and focus our operations, which is critical to setting us on a more sustainable path."
The layoffs come amid a period of transition for Stability AI. Last month, Mostaque announced his departure from the company to "pursue decentralized AI," following media reports questioning his credentials and the nature of a partnership with Amazon. Mostaque had characterized the deal as a strategic alliance, but it was later revealed to be a standard cloud computing contract.
Chris McKay
Despite the layoffs and leadership changes, Stability AI continues to release new products and expand access to its AI models. The company recently announced developer APIs for its Stable Diffusion 3 model and released a new version of its Stable Audio text-to-audio AI model.
However, the company has also faced legal challenges, including a lawsuit from Getty Images alleging that Stability AI used copyrighted material to train its models. The case is set to go to trial in the UK soon.
Despite the challenges, the new leadership is trying to put up a brave front and affirms that it remains committed to its mission of developing cutting-edge AI models and products. "Through the hard work and commitment of this team, we are making progress every day, moving us steadily in the right direction," Wong and Laforte wrote in their memo to staff.
The layoffs at Stability AI represent the first major workforce reduction at an AI foundation model company since the rise of generative AI. As the industry continues to evolve and mature, it remains to be seen how other companies will adapt to the challenges and opportunities presented by this rapidly developing technology.