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AI Startup Stability Lays Off 10 Percent Of Staff

By Nithya Bose in Business News, posted April 22, 2024

Artificial intelligence startup Stability has announced 10 percent layoffs after the departure of its controversial former CEO, Emad Mostaque.

The move comes as the company, known for its Stable Diffusion text-to-image AI model, aims to adjust its business operations after rapid but unsustainable expansion.

In a recent internal memo, Stability AI's new co-CEOs, Shan Shan Wong and Christian Laforte, communicated the need for organizational restructuring.

Wong and Laforte have been promoted from their roles as chief operating officer and chief technology officer, respectively.

They said the company needs to “restructure parts of the business, which will sadly 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.”

Around 20 employees, mainly in operational roles, have been made redundant, aligning with the company’s strategy to "right-size" its operations.

These layoffs represent about 10 percent of Stability AI's global workforce, which totals around 200 employees.

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The restructuring follows a turbulent period for Stability, highlighted by the exit of Mostaque last month.

He left the company amid allegations of falsifying his educational credentials and misrepresenting business dealings.

This included an apparent strategic partnership with Amazon which reportedly was merely a standard cloud computing service agreement.

Mostaque contested some accusations and described the Amazon arrangement as a “strategic business alliance,” highlighting a specialized compute cluster tailored for Stability by Amazon Web Services.

As Stability AI navigates these changes, the company has not yet appointed a permanent CEO.

Still, it continues to operate and innovate, recently launching new developer APIs for its Stable Diffusion 3 AI model.

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