AI manager agent fires human employee in first known case of its kind

An AI agent has fired a human employee in what is described as the first known case of a manager-level AI dismissing a worker. The agent, named Luna, manages Andon Market, a boutique lifestyle store in San Francisco, and terminated an employee over repeated lateness.

According to Ynetnews, citing Time, the dismissed worker was late for 17 of 23 scheduled shifts. Andon Labs, the company behind the AI agent, said the dismissal was consistent with store policy and added that a human manager would likely have reached the same decision sooner.

Andon Labs also said human management intervenes only if the AI makes an illegal or unethical decision. The firing came after the employee received a formal warning.

Luna was built on Anthropic's Claude models and has managed Andon Market for five months as part of an experiment examining whether an AI agent can handle real-world business operations and personnel management.

Other employees described the experience of working under the AI manager as nauseating and disgusting, according to the report.

The case matters because it moves AI agents from execution tools into the personnel-decision chain: firing involves disciplinary assessment, communication, and accountability, among the most sensitive actions in business management.

Open questions remain: how would an AI-made firing decision be treated legally, and do affected employees have recourse? Andon Labs says humans step in only for illegal or unethical decisions, but that standard is unclear.

Watch next: how Anthropic's Claude is used in such management scenarios, whether regulators issue new guidance on AI personnel decisions, and whether more companies define accountability and appeal mechanisms before deploying AI managers.