The recent announcement of Scale AI layoffs has served as a reminder that even the most promising startups and IT giants are not immune to the problems of the collapsing tech market as the artificial intelligence (AI) industry continues to grow.

Despite having a CEO heralded as “the next Zuckerberg” and a $7 billion valuation, Scale AI announced the “hardest change” – the layoff of 20 percent of its 700-person workforce on Monday in a blog post.