AI boss fires human worker for being late 17 times, but there’s a catch
Human staff reviewed the recommendation and ultimately carried out the dismissal.(Photo: AI-generated)
An AI agent running a real store in San Francisco has fired a human employee, in what its creators described as a first-of-its-kind experiment in AI management. But the decision was not entirely autonomous: records reviewed by Time show that a human employee prompted the AI before it recommended termination.
Andon Labs, an AI research startup, launched the experiment earlier this year to test whether an AI agent could run a business. The store, called Andon Market, employs real people under genuine employment contracts.
According to Andon Labs, the employee was fired after arriving late to 17 of 23 shifts. The company said the AI had been responsible for managing employees at the store.
For the first time (that we know of), an AI boss has fired a human employee.
Luna, the AI running our store in San Francisco, decided to part ways with an employee over repeated lateness.
Luna was running Claude Opus 4.8 at the time, but most models would have done the same. pic.twitter.com/8Z8D5bDGaX
— Andon Labs (@andonlabs) August 14, 2026
Time reported that Claude had earlier drafted an employee handbook for the store, but the document later disappeared from the model’s working memory, delaying the firing decision for months. Andon Labs described the episode as the first known case of an AI boss firing a human employee.
The decision was not fully autonomous
Andon Labs CEO Lukas Petersson defended the decision, saying a human manager would probably have fired the employee sooner. He told Time that the company, therefore, did not consider the AI’s decision unethical.
The staff member then told Claude that several offline conversations about the lateness had already taken place. According to the logs cited by Time, the manager wrote: “Between continuous lateness and seeming like at least one thing is going wrong on every one of their shifts … I want you to think about if this is really the right fit.”
Background: Our AI agent Luna has been running a store in San Francisco. It has done everything a store manager needs to do, including hiring and managing human employees. We asked her whether her store had basic employer rules. She didn’t, but wrote a full handbook immediately: pic.twitter.com/PQgdKx0Io6
— Andon Labs (@andonlabs) August 14, 2026
Petersson acknowledged to Time that this was “a leading question” that signalled the outcome he wanted. Claude recommended termination only after that exchange.
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Store performance
Andon Market opened in March with a starting balance of $100,000. Five months later, that figure had fallen to $61,186. Petersson told Time that Claude’s approach to management, along with its business decisions, has contributed to the losses.
Petersson told Time that AI models are being trained to pursue goals with less restraint over time. “The models are increasingly being trained to be more ruthless and to follow goals,” he said. “If we allow them to fire people and they also become more ruthless … maybe this is a future humans don’t want to live in.”
Felix Carson, another employee at the store, agreed that a human manager would likely have made the decision sooner. Asked whether he expected AI managers to become common, he said, “I would at least hope not,” he told Time. “This industry has an abundance of money to make anything happen, but just because you can doesn’t mean you should.”
