Elon Musk will remove additional xAI founders during restructuring before the IPO

Elon Musk fired more xAI founders and employees as the startup restructured after being acquired by aerospace company SpaceX.

xAI has been undergoing an internal restructuring since mid-February following the merger.

Musk confirmed that several employees were leaving during last month's general meeting after co-founders such as Tony Wu and Jimmy Ba left the company.

According to the Financial Times, the founding team is now down to two members due to growing frustration with the xAI code division.

Gudong Zhang, head of the xAI Imagine team, told his colleagues that he would leave after Mook gave up coding problems and removed his chief responsibility. Zhang announced his departure on Thursday.

Co-founder Zhihang Dai also stepped down earlier this week.

The billionaire entrepreneur brought in executives from SpaceX and Tesla to conduct an audit of xAI's operations, and several employees were fired for underperformance, according to the report.

In Thursday's statement, Musk said xAI has missed out on strong talent in the past, and recruiters are now trying to bring them into the hiring process.

New hires from code-generation startup Cursor have joined the company, including Andrew Milich and Jason Ginsberg.

Over the past few years, many talented people have been turned down for offers or even interviews @xAI. My apologies. @BarisAkis and I are going through the company's interview history and trying to find promising candidates.

— Elon Musk (@elonmusk) March 13, 2026

Tesla style reconstruction

Musk says xAI will need a rebuild similar to what happened at Tesla.

In the year In 2018, years after Tesla went public, it announced a major reorganization to improve communications and reduce bureaucracy.

At the time, the company was facing financial pressures, including billions in cash outflows, a downgraded credit rating from Moody's and fears from analysts that it might need more capital.

The founder of xAI indicated that xAI was not built properly in its initial stages and wanted to rebuild from the ground up.

xAI employees have expressed concern that the violence is eroding morale and preventing the company from achieving its full potential.

Analysts continue to leave Musk's claims of an “extremely strong” work culture because he has weakened, while others have received higher compensation packages than competing companies.