Snorkel AI, the Silicon Valley startup valued at $1.3 billion, reduced its workforce by 13 percent, cutting 31 employees from its total staff of 240. The layoffs focused mainly on software engineering roles, while most AI-centered functions were maintained. The company stated the cuts align with its shift toward offering “data-as-a-service,” which led to deprioritizing certain legacy operations. Snorkel AI emphasized support for the employees leaving and expressed gratitude for their contributions through the transition.
Focus on Streamlining Software Engineering Roles
The reduction impacted 31 employees, with 13 layoffs from the software engineering team. Among employees holding “AI” titles, only three were affected. Key senior roles, including the global head of business development and the director of AI solutions engineering, were among those cut. The company clarified that the reorganizations prioritize resources on the segments where it can deliver the most value to customers. Snorkel AI shared, “These changes allow us to focus our energy on the areas where we can have the greatest impact and better serve the evolving needs of our customers”.
Snorkel AI’s CEO, Alex Ratner, commented on the changes: “This, unfortunately, also means saying goodbye to some talented colleagues in these areas. We are grateful for their contributions and are supporting them through this transition”.
Shift toward Data-as-a-Service Model
Founded in 2020 as a Stanford spinout, Snorkel AI provides a platform that helps companies label and curate data programmatically for AI model training. Its products include Snorkel Flow and Expert Data-as-a-Service, designed to accelerate dataset preparation while reducing reliance on costly manual labeling. The company’s client base includes major technology firms such as Google and Anthropic.
In May 2025, Snorkel AI raised $100 million in its Series D funding round, which brought its valuation to $1.3 billion. The company intends to concentrate its efforts on expanding its data-as-a-service offerings, which have been gaining traction across sectors like finance, telecommunications, and healthcare. These changes involved shifting away from some legacy business segments while reinforcing the company’s core data services.
Tom Lounibos from Accenture Ventures remarked on Snorkel AI’s expertise in this domain, highlighting the importance of reliable datasets for model training and evaluation. Accenture has recently made strategic investments aligned with Snorkel AI’s approach to data preparation.
Industry Pressures Drive Workforce Adjustments
Snorkel AI’s workforce reduction follows similar moves seen at other data labeling companies affected by shifting market dynamics. For instance, Scale AI reduced its headcount by 14 percent along with contractor layoffs earlier in 2025. Changes at Scale AI were linked to ownership transitions and reported challenges in profitability. These restructuring actions illustrate broader pressures within the data preparation ecosystem as companies recalibrate operations to meet evolving demands.
Demand for human-led data annotation and training remains, particularly where domain expertise is critical. Nonetheless, startups in this segment are reevaluating their business models and operational setups to increase sustainability amid sector-wide shifts.
Snorkel AI’s consolidation around specific offerings signals a decision to strengthen what delivers the most immediate and measurable outcomes for clients. Its investments in product innovation continue with an eye on practical applications in regulated and complex industries.
The company’s updated focus positions it to deliver critical services needed for the reliability and safety of AI technology while balancing operational efficiency. The layoffs and refocus provide a window into the evolving dynamics in the data-driven foundation of AI development.
