Just weeks after Meta invested $14.3 billion in Scale AI and brought on founder Alexandr Wang, the AI startup is laying off 200 full-time employees, about 14% of its workforce.

In a memo to staff on Wednesday, interim CEO Jason Droege, who succeeded Wang, admitted the company expanded its generative AI capabilities too rapidly, leading to unnecessary layers of bureaucracy.

Despite the cuts, he emphasized that Scale AI remains well-funded and well-resourced.

“These changes will make us more nimble — enabling us to react more quickly to shifts in the market and customer needs,” Droege wrote in the memo. “This structure will allow us to better serve the customers we have today and win back customers that have slowed down work with us.”

Droege noted that Scale AI plans to “significantly increase headcount” in the second half of the year across its application business units, including its enterprise, public sector, and international public sector divisions.

Scale AI, founded in 2016, built its reputation by helping tech giants like OpenAI, Google, and Microsoft prepare data for training advanced AI models.

But its key partnerships appear to be unraveling—OpenAI has been scaling back its collaboration over the past year, while Google is reportedly ending its relationship with the company following Scale’s recent deal with Meta, according to Reuters.