Mercor cut at least 50 staff by two-sentence email, and its CEO says that was not a layoff
The $10 billion supplier of human training data says it is profitable, holds more than $1 billion in cash and is still hiring. The day before its job cuts surfaced, it promoted an agent that automates engineers' incident work.
Vincent Jiang · 3 min read
Fifty exits and a two-sentence email
Mercor~$2B — Mercor, private, latest valuation ~$2B, the San Francisco company that supplies lawyers, scientists and other experts to train AI models for OpenAI$1.18T — OpenAI, private, latest valuation $1.18T, Google and Anthropic$350B — Anthropic, private, latest valuation $350B, terminated at least 50 full-time employees last week across engineering, product and cybersecurity, in the US and India, people close to the company told Gazetteer SF. The notice was a two-sentence email giving no reason. Many were escorted out by security. One cut engineer was regarded by colleagues as a top performer; another had just been given a raise. 1
The word the company rejects
Chief executive Brendan Foody wrote on X: "It wasn't a layoff and had nothing to do with costs. We're profitable, have $1B+ in cash... The word layoff is inaccurate." A spokesperson said "less than 5% of the company left" and that Mercor is still hiring; insiders put headcount near 650, a figure Mercor declined to confirm. On those two unconfirmed numbers, 50 exits are closer to 8% than 5. The careers page did list more than 100 open roles on October 15. 12
The valuation curve keeps climbing
The exits land on a steep curve: a $100 million round at a $2 billion valuation, a $350 million Series C at $10 billion in October 2025, and talks reported in July to raise $500 million at $20 billion. Mercor says annualized revenue passed $2 billion in June, double February. The offset is trust: after a March 31 data breach, the listed customer Meta−0.71% — Meta, down 0.71 percent today paused its contract indefinitely, and Mercor faces at least seven class actions. 3451
From $2B to $10B to a $20B target in under eighteen months
- Post-money valuation
- Estimate
Data
| Post-money valuation | |
|---|---|
| Series B (2025) | $2B |
| Series C (Oct 2025) | $10B |
| Talks (Jul 2026) (estimate) | $20B |
The agent demo landed first
The day before the cuts surfaced, on October 13, Mercor and the password manager 1Password announced an agent that automates site reliability investigations, the work of diagnosing outages, built on Codex from more than 300 historical incidents. It hit 95% accuracy across 78 evaluation runs and 57% lower median time to remediate, per 1Password chief technology officer Nancy Wang. Mercor's own study, published October 1, had 12 licensed accountants average about 37% on simplified tasks the company says models now ace, at over ten times lower cost per grading criterion. 67
The contract side felt it first
Mercor's gig workers report the same compression from below. One was trained onto a $75-an-hour project, paid $550 to onboard, then offboarded after two weeks of positive feedback for "changing project scope." Another received an instant offer at $60 an hour, half the main project's rate, capped at 15 hours a week. 89
What to watch
Three readings decide this story: whether the $20 billion round closes amid the lawsuits, whether head of people Temi Soleye, hired from Palantir−2.06% — Palantir, down 2.06 percent today in August to keep "the talent bar high," ever puts a reason on the record, and what the next benchmark aces. Mercor collects either way: once for the humans who train the models, and again for the proof the models need fewer of them. 41
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
