April 18 (Reuters) - Stability AI will lay off some

staff as part of a restructuring process, according to an

internal memo seen by Reuters on Thursday as well as a person

familiar with the matter, weeks after founder Emad Mostaque

resigned as CEO.

The move signals another shift for the AI startup after

Mostaque's departure as chief executive and member of the

company's board, in the face of stiff competition from firms

like ChatGPT-maker OpenAI and French startup Mistral.

Mostaque stepped down from the board of the company, which

makes the Stable Diffusion image-generation tool, in March, to

pursue decentralized AI.

"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," Interim co-CEOs Shan Shan Wong and Christian

Laforte said in an internal memo to employees.

The company, which has also released AI models to

generate audio and video using text prompts, said last October

that it had nearly 200 employees around the world.

The employees affected by the layoffs will be informed

individually and the U.K.-based company will hold a regular

townhall on Thursday, the memo said.

However, the number of staffers to be laid off was not

disclosed.

Stability AI counts venture capital firm Lightspeed

Venture Partners, actor Ashton Kutcher's Sound Ventures,

investment management firm Coatue and chipmaker Intel ( INTC )

as investors, according to data firms Crunchbase and Pitchbook.

The British firm made its Stable Diffusion 3 model

available to developers on Wednesday through an application

programming interface.