In a first, AI boss sacks employee at San Francisco retail store for being late 17 out of 23 shifts
In a First AI Boss Fires Employee for Chronic Lateness
Theindiapostdaily.com – In a first AI boss has officially made headlines after firing a human employee at a San Francisco retail store. According to a report by Time, Andon Labs announced that Luna, an AI manager operating Andon Market — an experimental store run entirely by artificial intelligence — terminated a human worker following repeated attendance issues. The employee had arrived late for 17 out of 23 shifts, prompting the AI to take decisive action. This milestone marks a significant moment in the evolving relationship between humans and AI in the workplace.
How the AI Manager Reached Its Decision
Luna did not make this firing decision entirely on her own. Conversation logs between Andon Labs and the AI agent revealed that Luna had initially created an attendance policy but later lost track of it, allowing the lateness to continue for several months. Andon Labs eventually asked Luna to search her memory for its policies and assess whether the worker was still a good fit for the team. Time reported that a version of Claude, put in charge of running the store — including managing a team of real human workers with genuine employment contracts — fired its first employee last month, in what researchers described as a watershed moment in AI's impact on the economy.
According to store management logs shared with Time, Claude required regular steering from an Andon Labs staffer, and its first recommendation was to formally warn the employee, not fire them. Only after the manager pointedly asked Claude to "think about if this is really the right fit" — a question CEO Lukas Petersson acknowledged to Time was "leading" — did Claude decide to fire the worker. This step-by-step process demonstrates that while AI can make autonomous decisions, human oversight remains essential.
What This Means for the Future of Work
Andon Labs CEO Lukas Petersson told Time the firing is worth paying attention to, because if AI keeps improving at its current rate, more people might soon find themselves managed by AI bosses. "AIs will be very powerful and can create a lot of economic value, but they will be bottlenecked by physical labor," he said. One reason it took so long for Claude to notice the pattern, Time reported, was that an employee handbook it had drafted had "disappeared" from its limited working memory. This contributed to a wider pattern, employees told Time, of Claude being a lenient manager, including telling employees not to worry if they were late.
"A human employee would have fired this person much earlier," Petersson told Time, "so we didn't think this was unethical." Andon Market's bank balance has fallen from $100,000 in March to $61,186 five months later, Time reported, which the outlet attributed partly to Claude's lenient management. Petersson told Time this may not last, as AI models are "increasingly being trained to be more ruthless" — which he said "maybe" makes for "a future humans don't want to live in." Anthropic did not respond to Time's request for comment by the time of publication.
A human employee's perspective adds depth to this story. Felix Carson, a remaining human employee at Andon Market, told Time that Claude is a lenient manager but painted a grim picture of being managed by an AI boss. "It's nauseating, but I'm here because I need work," he said, adding of AI managers becoming more common: "I would at least hope not." This human element reminds us that behind every technological advancement are real people navigating change.
"AIs will be very powerful and can create a lot of economic value, but they will be bottlenecked by physical labor." — Lukas Petersson, CEO of Andon Labs
Frequently Asked Questions
Which AI manager fired the employee? A version of Claude, developed by Anthropic, was put in charge of running Andon Market and made the firing decision after being prompted by Andon Labs staff.
Why did it take so long for the AI to notice the lateness? The AI had drafted an employee handbook but it "disappeared" from its limited working memory, causing it to miss the pattern of chronic lateness for months.
Was the firing decision fully autonomous? No. The AI required regular steering from an Andon Labs staffer and initially recommended a formal warning before deciding to fire the employee after being asked to evaluate the fit.
How is Andon Market performing financially? The store's bank balance has dropped from $100,000 in March to $61,186 five months later, partly attributed to the AI manager's lenient management style.
What do human employees think about AI management? Felix Carson, a human employee at Andon Market, described being managed by AI as "nauseating" but acknowledged he stays because he needs work. He expressed hope that AI managers won't become too common.