In a surprising turn of events, Merkor, a startup that recently celebrated a $10 billion valuation, has made headlines for a questionable move that has caused quite a stir in the contractor community. The San Francisco-based AI training company, co-founded by a trio of ambitious 22-year-olds, has recently found itself in hot water after slashing wages for thousands of workers. As the old saying goes, “with great power comes great responsibility,” but it seems this startup may have skipped that lesson in their rush to the top.
Merkor, having just raised a hefty $350 million, shocked contractors when they abruptly canceled an ambitious AI project that involved extensive work for Meta’s Facebook and Instagram video platform, known as Reels. Just a week after their funding triumph, workers logged into Slack, only to realize they had been locked out like a forgotten board game gathering dust in the attic. Many were left wondering what had gone so wrong so quickly.
These perplexed contractors, numbering in the thousands and part of a vibrant Slack community, had dedicated months to reviewing video and audio content to train the algorithms of popular social media. They were confident that their project would roll on until at least December, per communications from management. But as swiftly as their hopes soared to new heights, they plummeted back to earth when they received emails stating that the project had been canned, leaving them in the lurch without any prior warning.
To add insult to injury, hours after announcing the project’s cancellation, Merkor pitched a rehire offer at reduced rates. The company suggested a new role on a different project, humorously named NOVA, and promised “steadier task volumes” while simultaneously offering a wage cut from $21 an hour to just $16. This reduction isn’t just a minor hiccup; it dips below the minimum wage in several states, including California, Washington, and Connecticut, leaving many contractors questioning the ethics of such a move.
The response from the contractor community has been a mixture of disbelief and frustration. They voiced their discontent across social media platforms, expressing feelings of disrespect and a lack of consideration for their contributions. These contractors, who put their hearts and minds into developing AI technology, found themselves treated like pieces of a chess game, easily moved or discarded without notice. Recognizing that these are people behind the screens, one former contractor emphasized that there’s a difference between human workers and the algorithms they were helping to create.
While Merkor’s young leadership may be basking in the glow of their billionaire status, they now face a reputational challenge that could chip away at their newfound fortune. Investors and workers alike are watching closely to see how the company handles this backlash and whether it can maintain the support of both its funding sources and the contractors who help bring its ambitious plans to life. As they navigate these stormy waters, Merkor’s co-founders might want to remember that sustainable success often relies on treating all stakeholders with respect and fairness. Without a clear course correction, they may discover that all that glitters is not gold.
