In this photo illustration the Duolingo logo seen displayed on a smartphone.

Duolingo cuts 10% of its contractor workforce as the company embraces AI

In this photo illustration the Duolingo logo seen displayed on a smartphone.

Image Credits: Rafael Henrique/SOPA Images/LightRocket (opens in a new window) / Getty Images

Duolingo is the latest company to cite AI as a reason for job cuts. The company confirmed it cut around 10% of its contractor workforce at the end of 2023, as it turns to AI models like OpenAI’s GPT-4 to streamline content production and translations.

The broad application of ChatGPT and other large language models could impact a wide range of job roles, including language-based tasks. According to the World Economic Forum’s 2023 Future of Jobs report, AI will transform 23% of jobs in the next five years.

Redditor No_Comb_4582 was the first to note the Duolingo layoffs, writing that they were offboarded as a contractor on December 15, with a screenshot of an email from the company attached to the post.

Image Credits: Reddit/No_Comb_4582

“The reason [Duolingo] gave is that AI can come up with content and translations, alternative translations, and pretty much anything else translators did. They kept a couple people on each team and call them content curators. They simply check the AI crap that gets produced and then push it through,” wrote No_Comb_4582.

A company spokesperson explained to us that GPT is used to translate sentences and then “human experts validate that the output quality is high enough for teaching and is in accordance with CEFR standards for what learners should be able to do at each CEFR level.” The Common European Framework of Reference for Languages (CEFR) is an international guideline for explaining language proficiency.

Duolingo also uses GPT-4 to power experiences for its premium subscription tier Duolingo Max, including AI-generated feedback and a chatbot to help users practice conversations. Duolingo also has its own proprietary AI model, “Birdbrain” that personalizes lesson content.

However, the company disputed calling the departures “layoffs,” saying that only a “small minority” of Duolingo’s contractors were let go as their projects wrapped. A spokesperson also cited various reasons that could be the case, like a contract being completed, or “improvements to content creation operations” that no longer require as many people to do the work. In a comment to Bloomberg, the company also confirmed that part of the reason it no longer needed as many people was attributable to AI.

Understandably, both the contractors and Duolingo users were upset by the job cuts, as it adds to the ever-growing fear that AI will replace human workers. It’s an especially tough blow for contractors, who already experience job insecurity going from one assignment to the next, and often struggle to find permanent jobs due to their spotty resumés.

In an X post, @bvnnyjungkook said she was a contractor for Duolingo and noted that a majority of its workforce are contractors, which is usually a sign that a company wants to save money because they don’t have to factor in insurance obligations or benefits like paid time off and sick leave.

Duolingo had 600 full-time employees in 2022, per company filings.

Plus, Duolingo users worry that AI translations may take away the value of a human expert who has a deeper understanding of languages, idiomatic expressions and cultural nuances.

Duolingo launches new subscription tier with access to AI tutor powered by GPT-4

Atlas founders Gianina Rossi, Karen Serfaty, Josefina Van Thienen

Atlas helps companies offer contractor benefits no matter where they are located

Atlas founders Gianina Rossi, Karen Serfaty, Josefina Van Thienen

Image Credits: Atlas / Atlas co-founders, from left, Gianina Rossi, Karen Serfaty and Josefina Van Thienen

Karen Serfaty and Gianina Rossi, both engineers from Argentina, worked for U.S.-based companies over the past 10 years, and the same issue kept coming up: how to manage taxes while being a contractor in another country.

Joining with San Francisco-based Josefina Van Thienen, who had worked at Microsoft building strategic partnerships with tech companies focusing in AI, they took a deeper look at the problem and found taxes weren’t the only problem when companies want to hire globally.

“When you’re working from Europe, Asia or Latin America, you are usually getting paid in U.S. dollars, not your local currency,” Serfaty, CEO, told TechCrunch. “You try to go to your HR manager for help in sending the money to a bank account, and the answer is usually ‘no.’”

How to approach building your first employee benefits package

So the trio started Atlas, a work benefits tool for global companies to manage their contractor benefits from one place. Through Atlas, companies can offer benefits like tax management, health insurance and social perks to their entire headcount no matter where they are located. There is also a marketplace of benefits that can be customized to the company or contractor.

They founded the company from Argentina in 2021. Latin America in general has become a hotbed of global remote talent, Serfaty said. The employee benefits market itself has experienced a lot of change and growth, especially during the global pandemic when there was a surge in remote hiring.

Customers took note. Atlas is working with companies, including Mercury, Firstbase, Deel and Payoneer.

“The goal was to get three customers in a month or drop the project, and we secured five,” Serfaty said. “Those clients’ accounts grew 5x in a year with us.”

Since launching the platform in March 2023, the company has designed proprietary features, incorporated hundreds of benefits and expanded their presence to cover 26 countries in the Americas and Europe. During that time, the company grew its revenue 2x and is close to an annual recurring revenue of $1 million.

Investors noticed, too. Atlas is the latest company to raise some seed extension funding to the tune of $2.75 million. Hi Ventures (former ALLVP) led the round and was joined by Oskar Hjertonsson, founder of Cornershop. In total, the company raised close to $5 million with other backers, including Jason Calacanis and Pioneer, investing in the seed round.

“We are seeing a lot of traction from customers, including bigger customers, with no churn, so we’re seeing a lot of stickiness,” Serfaty said. “The goal is to now grow our U.S.-based companies with global reach.”

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