Elon Musk has laid off additional xAI co-founders and employees as the company restructures after being acquired by his aerospace company SpaceX ahead of a potential initial public offering.
xAI has been proceeding with internal reorganization since mid-February after the merger.
After co-founders such as Tony Wu and Jimmy Barr left the company, reducing the original founding team from 12 members to six, Musk acknowledged the departure of several staff members during an all-hands meeting last month.
According to the Financial Times, dissatisfaction with xAI’s coding department has grown, with the founding team now down to two members.
Guodong Zhang, leader of xAI’s Imagine team, told colleagues he was leaving the company after Musk blamed him for coding issues and removed him from core responsibilities. Zhang announced his resignation on Thursday.
Co-founder Jihan Dai also stepped down earlier this week.
According to the report, the billionaire entrepreneur brought in executives from SpaceX and Tesla to audit xAI’s operations, resulting in the firing of several employees deemed to be underperforming.
Musk said in a statement Thursday that xAI has lost out on top talent in the past and that recruiters are now trying to bring them back into the hiring process.
New hires from code generation startup Cursor include Andrew Milich and Jason Pinsberg.
Over the past few years, many talented people have been turned down by @xAI for offers or even interviews. very sorry. @BarisAkis and I look at the company’s interview history and contact potential candidates. https://t.co/tvhipa1lu1
— Elon Musk (@elonmusk) March 13, 2026
Tesla-style restructuring
Musk said xAI will require a restructuring similar to what happened with Tesla.
In 2018, a few years after Tesla went public, he announced a major reorganization to improve communication and reduce bureaucracy.
At the time, the company was facing financial pressures, including billions of dollars in cash outflows, a credit rating downgrade by Moody’s and concerns from analysts that it might need additional capital.
xAI founders say xAI was not built properly in its early stages and needs to be rebuilt from the ground up.
xAI staff have expressed concern that the disruption is hurting morale and preventing the company from reaching its full potential.
While researchers continue to quit, exhausted by Musk’s demands for a “very hardcore” work culture, others have accepted better pay packages from competing companies.
Disclosure: This article was edited by Vivian Nguyen. Please see our Editorial Policy for more information on how we create and review content.
