Open artificial intelligence model developer Stability AI Ltd. is laying off employees as part of a restructuring plan after founder and former Chief Executive Officer Emad Mostaque resigned weeks ago.

The plan came to light in a memo obtained by CNBC published today and a person familiar with the matter who spoke under terms of anonymity. Stability, which is best known for the popular Stability Diffusion text-to-image AI model that can take a natural language prompt and turn it into an imaginative, vivid picture.

According to the company’s newly appointed co-CEOs Shan Shan Wong and Christian Laforte said the company leadership has been working on “a plan to reduce our cost-base, strengthen support with our investors and partners, and enable our teams to continue developing and releasing innovative products.”

This plan means that the company will lay off 10% of its workforce, or 20 people. Publicly available information shows that Stability employs about 200 people globally. According to a source familiar with the matter speaking to CNBC, employees affected by the layoffs are mostly on the operational side of the business.

“These decisions have not been taken lightly and they are intended to right-size parts of the business and focus our operations, which is critical to setting us on a more sustainable path — and to put us in the best possible position to continue developing cutting-edge models and products,” Wong and Laforte wrote in the memo.

Mostaque left the company in late March stating that he was interested in a different kind of development and governance structure for AI. “You can’t beat centralized AI with more centralized AI,” he said in a post on X, referring to how giant companies such as OpenAI and Anthropic PBC hold centralized control of models. “The concentration of power in AI is bad for us all. I decided to step down to fix this at Stability & elsewhere,” he added.

Aside from Mostaque leaving the company, the startup has lost many of its staff among its research team and other key members. Mid-March, Forbes reported that members of the AI research team responsible for developing Stable Diffusion were leaving the company. The researchers included team leader Robin Rombach alongside fellow researchers Andreas Blattmann and Dominik Lorenz.

Others leaving Stability AI included former Chief Researcher David Ha, and Vice President of Audio Ed Newton-Rex, who reportedly left in November in protest over how the startup handled copyrighted data.

With the departure of Mostaque, Stability is still looking for a permanent CEO to replace him and lead the company.

This news comes right on the heels of the company opening access to its most powerful next-generation text-to-image AI model Stable Diffusion 3 for developers and beta access to Stable Assistant, an AI chatbot that will be able to help users make images and artwork conversationally.

Image: Stability AI