AI Manager Fires Employee Over Repeated Late Arrivals

An unusual incident in San Francisco has brought renewed attention to the growing role of artificial intelligence in workplace management. Andon Labs is operating an experimental store called Andon Market, where an AI manager named Luna has been assigned responsibilities ranging from product selection and pricing to branding and staff management.

The issue arose after an employee reportedly arrived late for 17 of 23 shifts. Although Luna had created an attendance policy, it failed to enforce the rules consistently for several months. Researchers later asked the AI to review its previous policies and assess the employee’s performance. Luna subsequently recommended terminating the employee. Human staff reviewed the recommendation and made the final decision to complete the termination process.

Andon Labs CEO Lucas Peterson said he did not consider the incident unethical, arguing that a human manager might have taken action even earlier. He described the experiment as an example of how AI could create economic value while still facing limitations in areas that require physical work.

The experimental store has not yet become profitable. Its initial bank balance of $100,000 has reportedly fallen to around $61,186 after five months. The incident has highlighted the expanding responsibilities that can be assigned to AI while also exposing challenges related to long-term memory and consistent enforcement of rules.