World’s youngest self-made billionaires face backlash over alleged pay cuts at AI startup Mercor

By Phong Ngo November 19, 2025 | 05:21 pm PT

Mercor, an AI recruiting startup founded by the world’s youngest self-made billionaires, is facing backlash from contractors after shutting down a key project and allegedly offering lower pay for similar roles.

On Nov. 11, contractors working on the Musen project, which involved thousands of workers, were informed it was ending due to "project scope changes," Business Insider reported.

Shortly after, they were offered positions on a new project, Nova, at a reduced hourly rate of $16, $5 less than the $21 per hour they had been earning on Musen.

Mercor, valued at $10 billion and founded by CEO Brendan Foody, CTO Adarsh Hiremath, and board chairman Surya Midha, defended the decision, explaining in an email that the shift to Nova was intended to provide "greater earning stability and consistent access to work," as reported by Forbes.

The company is part of the data-labeling sector, which powers the AI industry. Major tech companies like Meta and OpenAI rely on firms like Mercor to categorize data and improve the accuracy of AI models.

Mercor's founders (left to right): Adarsh Hiremath, Brendan Foody and Surya Midha. Photo courtesy of Mercor's Instagram

Workers on the Musen project had been analyzing video content for platforms like Instagram and Facebook, expecting the project to run until December. However, some contractors reported recent pauses in the project, with promised hours being cut back.

"It was all very sudden. I have never seen anything like that and have worked on a few AI projects," one contractor told Forbes. Another contractor added, "I know we are working with AI but we don’t work for AI. You don’t just dump thousands of people, that's not just right."

Despite the pay reduction, a contractor who moved from Musen to Nova noted that the tasks remained nearly identical, but for $5 less an hour.

Mercor’s head of communications, Heidi Hagberg, called the claims "inaccurate" and declined to comment further. Foody stated that the company had clearly outlined in its job descriptions and onboarding materials that the Musen project was "temporary."

Mercor offers various contracting opportunities across industries, with average rates of $90 per hour. The company hires experts in fields such as journalism, law, medicine, and gaming, according to People.