Elon Musk’s artificial intelligence company xAI abruptly laid off at least 500 workers from its data annotation division on Friday night, marking one of the sharpest pivots yet in its effort to refine Grok, the company’s flagship chatbot.

The move, focused on replacing generalist AI tutors with domain-specific specialists, mirrors Musk’s earlier approach at Twitter (now X), where he slashed headcount soon after taking over in 2022 and refocused operations around a smaller core team.

Emails sent to employees and reviewed by Business Insider confirmed the restructuring.

“After a thorough review of our Human Data efforts, we’ve decided to accelerate the expansion and prioritization of our specialist AI tutors, while scaling back our focus on general AI tutor roles. This strategic pivot will take effect immediately,” the email read. “As part of this shift in focus, we no longer need most generalist AI tutor positions and your employment with xAI will conclude.”

Affected staff were told they would remain on payroll until the end of their contracts or November 30, but their access to company systems was cut off immediately.

Cutting the Backbone of Grok

The layoffs struck at xAI’s largest team. Annotators have played a central role in Grok’s training, teaching the model how to contextualize raw data and categorize information for human-like responses. Before the layoffs, the main Slack channel for annotators counted more than 1,500 members. By Friday evening, screenshots showed that the figure had dropped to just over 1,000 and continued to fall as accounts were deactivated.

After publication of the layoffs, an xAI spokesperson pointed to a company post on X announcing plans to “surge our Specialist AI tutor team by 10x,” with openings in areas such as STEM, finance, medicine, and safety.

“Specialist AI tutors at xAI are adding huge value,” the company said, linking to its careers page.

A Week of Signals

The decision capped off a turbulent week. Days earlier, several senior-level employees, including the head of the annotation unit, had their Slack accounts deactivated. Workers were then told to expect a team reorganization.

On Thursday night, newly appointed leader Diego Pasini — who joined xAI in January and is currently on leave from his undergraduate studies at the Wharton School of Business — instructed staff to complete tests to determine their fit for specialist tracks.

The assignments covered traditional fields like coding, STEM, and finance, as well as Grok-specific areas such as “personality and model behavior” and even “shitposters and doomscrollers.” Some tests focused on chatbot safety, including “red teaming,” while others assessed skills in audio and video annotation.

Pasini’s post asked annotators to complete at least one test by Friday morning. More than 200 workers marked the message with a green check emoji, while over 100 left questions and comments. One worker criticized the late-night timing: “Doing this after people have gone home for the day is pretty shady.” That employee’s Slack account was deactivated soon after, multiple workers said.

Musk’s Management Playbook

The sudden downsizing and sharp pivot recall Musk’s early days at Twitter. After acquiring the platform in late 2022, he laid off thousands of employees — including engineers, content moderators, and product managers — and leaned heavily on smaller teams tasked with specific missions. The strategy, while controversial, was designed to cut costs and concentrate resources on projects Musk deemed vital.

At xAI, Musk appears to be repeating the formula, betting that a leaner, specialist-heavy workforce will push Grok closer to his stated goal of building “truth-seeking” artificial general intelligence.

A Wider AI Industry Divide

The layoffs also highlight diverging strategies among leading AI developers. OpenAI, Anthropic, and Google DeepMind continue to rely heavily on broad annotation workforces, often supplemented by external contractors in Africa, Asia, and Eastern Europe. These generalist annotators handle wide-ranging tasks such as content moderation, labeling, and basic language training.

But xAI’s pivot suggests Musk sees diminishing returns in that model. By doubling down on domain specialists — from medicine to finance to safety — xAI is prioritizing higher-quality, expertise-driven training data. Proponents believe this will help reduce hallucinations and boost performance in critical, high-stakes fields. Critics counter that the company risks losing the breadth of data and human context that generalist annotators provide.

For xAI, the gamble is to cut costs, streamline teams, and scale up expertise. The risk is equally apparent. Shedding hundreds of annotators means shedding institutional knowledge of how Grok has been shaped to date. Whether the 10x surge in specialists can offset that loss remains to be seen.

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Nigeria recorded an upswing in its external trade position in the second quarter of 2025, as the country’s trade surplus widened by 44.3% to N7.46 trillion, up from N5.17 trillion in the previous quarter.

This is according to the latest Foreign Trade in Goods Statistics report by the National Bureau of Statistics (NBS), which highlights how buoyant export earnings outpaced import pressures in Q2 2025.

Nigeria’s total exports stood at N22.75 trillion in Q2, a 10.5% increase from Q1 and 28.4% higher than the same period in 2024. Imports slipped marginally by 0.9% quarter-on-quarter to N15.29 trillion, creating the wider surplus that has boosted Nigeria’s external account.

Crude oil, which contributed N11.97 trillion or 52.6% of total exports, posted a decline of 5.1% year-on-year and 7.6% compared to Q1. The fall was, however, offset by strong growth in other petroleum products, which nearly doubled year-on-year to N7.74 trillion, reflecting gains from gas exports and refined petroleum products. Non-oil exports also proved resilient, rising to N3.05 trillion, representing 13.4% of total exports.

A closer examination of sectoral performance reveals that manufactured goods exports were one of the standout stories of the quarter. The sector expanded to N803.8 billion, a 173% increase from Q1 and a 67% rise compared with the same quarter of 2024. Key manufactured exports included vessels, floating platforms, and aluminum alloys, shipped largely to European and Asian markets.

Solid minerals also strengthened their contribution, with exports jumping by 31% from Q1 to N77.3 billion, led by shipments of cement clinkers and mineral substances to destinations like China and Cameroon.

This performance highlights a gradual diversification of Nigeria’s export base beyond hydrocarbons, though oil and gas still accounted for more than 85% of total exports.

Imports remain heavy as China tightens grip

On the import side, Asia dominated with N7.65 trillion, representing 50% of total imports. China remained Nigeria’s largest import partner, supplying N4.96 trillion worth of goods — more than double that of the United States, which followed with N2.16 trillion. Other key import sources included India, the Netherlands, and the United Arab Emirates.

The bulk of imports comprised machinery, refined petroleum products, wheat, and pharmaceuticals. Manufactured imports were particularly weighty, at N7.88 trillion, showing Nigeria’s continued reliance on foreign industrial inputs. Agricultural imports also grew to N1.18 trillion, driven by wheat imports from Canada and Russia.

Key trading partners

Spain retained its position as Nigeria’s largest export destination in Q2, receiving goods worth N2.47 trillion, or 10.9% of total exports. It was followed by India with N1.98 trillion, France with N1.62 trillion, the Netherlands with N1.54 trillion, and Canada with N1.43 trillion. Together, these five countries accounted for nearly 40% of Nigeria’s total exports.

Regionally, Europe remained the top export market, absorbing 38% of Nigeria’s shipments. Asia followed with 33%, the Americas accounted for 16%, while Africa took 13%. Within Africa, ECOWAS countries stood out with exports worth N1.93 trillion, dominated by petroleum products such as crude oil, kerosene, jet fuel, and gas oil.

On the import side, Asia maintained its dominance, supplying half of Nigeria’s total imports at N7.65 trillion. China led the way with N4.96 trillion worth of goods, more than double the United States at N2.16 trillion. Key imports included refined petroleum products, wheat, and telecommunication machinery, highlighting Nigeria’s reliance on external supply for essential goods.

Key transport hubs

Maritime transport continued to dominate Nigeria’s trade logistics, carrying 99% of exports and 95% of imports.

Apapa Port retained its primacy, handling N17.93 trillion worth of exports and N6.96 trillion worth of imports.

The Lekki Deep Sea Port also emerged as a growing hub, accounting for over 10% of exports and 16% of imports, pointing to its increasing role in easing Nigeria’s port congestion.

Past deficits and missed opportunities

The sharp rise in Nigeria’s trade surplus contrasts with its struggles in the previous decade. Between 2019 and 2021, the country consistently recorded trade deficits as falling crude prices, COVID-19 disruptions, and surging import bills eroded its external balance. In 2020 alone, Nigeria posted a trade deficit of N7.38 trillion, its worst on record at the time.

While the rebound into surplus since 2022 has offered some relief, economists argue that Nigeria has significantly fallen behind its peers since 2015. South Africa and Egypt have since overtaken Nigeria to claim the first and second spots of the African economy, respectively. Nigeria’s economy is still heavily dependent on oil, which still makes up more than four-fifths of its export earnings.

Both the IMF and the World Bank have consistently urged Nigeria to diversify its economy by prioritizing manufacturing and non-oil exports. The current upswing in manufactured goods and solid minerals exports hints at early progress, but analysts caution that these gains remain small compared to the scale needed to close the gap with peers.

The trade surplus offers Nigeria breathing space to strengthen its foreign reserves and reduce pressure on the naira. The positive balance is expected to help stabilize the macroeconomic environment, though the dominance of petroleum in export earnings leaves the country vulnerable to external shocks.

Looking ahead, analysts say the outlook splits along two paths. If Nigeria consolidates gains from non-oil sectors and reduces dependence on imported refined fuel, the surplus could become a foundation for more sustainable growth. But if oil prices weaken further or industrialization continues to lag, Nigeria may find itself repeating the cycle of temporary surpluses followed by deeper deficits.