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AI fires human employee for being late
The AI, called Luna, works at Andon Market

AI fires human employee for being late

Aug 16, 2026
03:39 pm

What's the story

In a first-of-its-kind incident, an artificial intelligence (AI) system has fired a human employee from a retail store in San Francisco. The AI, called Luna, works at Andon Market, an experimental store run entirely by AI. The decision to dismiss the worker was taken after they were late for 17 of their 23 shifts.

Decision process

AI didn't make firing decision by itself

The AI manager, Luna, didn't make the firing decision all by itself.

Conversation logs between Andon Labs and Luna show that it had created an attendance policy but lost track of it over time.

This allowed the employee's lateness to go unchecked for months.

Eventually, Andon Labs prompted Luna to recall its policies and determine if the worker was still suitable for its role.

Economic implications

Future where humans work under AI bosses

Andon Labs CEO Lukas Petersson told Time that he believes this incident is significant as it indicates a future where more people could be working under AI bosses.

He said, "AIs will be very powerful and can create a lot of economic value, but they will be bottlenecked by physical labor."

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Management style

AI manager's firing decision was lenient

The employee handbook created by Claude, the AI in charge of running Andon Market, had "disappeared" from its limited working memory.

This led to a pattern of leniency, with Claude even telling employees not to worry if they were late.

Petersson clarified that they didn't find this unethical as a human employee would have fired such an employee much earlier.

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Financial implications

Human employee described working under an AI boss as 'nauseating'

Andon Market's bank account has dropped from $100,000 in March to $61,186 five months later.

Petersson said this could change as AI models are "increasingly being trained to be more ruthless."

Felix Carson, a human employee at Andon Market, described working under an AI boss as "nauseating." He also expressed hope that such managers don't become common in the future.

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