AI agent running retail store fires human employee for coming late

An AI agent running a San Francisco store fired one of the human employees for coming late to work.Luna decided to terminate one of the store's three employees, reportedly because of repeated lateness and other behavioural problems.An AI boss has fired its first human employee for repeatedly coming late to work. Yes, you heard that right. And no, this isn’t a script or some hypothetical situation. An AI agent running an experimental retail store in San Francisco has actually recommended firing a human employee after they were late for 17 of 23 shifts.The AI is part of an experiment by Andon Labs, an AI research company testing what happens when an AI agent runs a real business. As part of the experiment, the company has put its AI agent, Luna, in charge of a retail store in San Francisco. Luna handles things like store operations, pricing, workplace policies and managing employees, while human staff also work at the store.Now the incident involves one of the employees who was repeatedly arriving late for work. According to Andon Labs, Luna reviewed the employee’s attendance record and decided it was time to part ways after they were late for 17 of 23 shifts.Andon Labs shared the incident in a post on X, describing it as the first known case of an AI boss firing a human employee. The company said Luna was running Claude Opus 4.8 when it made the recommendation. “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,” the company wrote.“Luna was running Claude Opus 4.8 at the time, but most models would have done the same.”However, the decision was not entirely autonomous. Human staff reviewed Luna’s recommendation and ultimately carried out the dismissal.However, the decision was not entirely autonomous. Human staff reviewed Luna’s recommendation and ultimately carried out the dismissal.How does Luna AI agent manage the store The store, called Andon Market, is part of the company’s larger experiment with AI agents. Andon Labs gave Luna a $100,000 budget, a corporate card, internet access and a three-year lease, with the goal of opening a store and making a profit. The store opened on April 1 and sells products including books, candles, artwork, prints, games and branded merchandise.Luna has a role in several parts of the business. It helpes in choosing products, setting prices and opening hours, creating branding, post job listings, interview applicants and hire employees. While most of the work has been given to AI, humans still handle tasks that need physical work or additional support, such as dealing with permits. The store’s employees are formally employed by Andon Labs and have guaranteed pay and legal protections. In short, AI is the boss of humans. Why AI fired the employeeIt started with the employee’s repeated lateness. Andon Labs says Luna had created an employee handbook and attendance policy months earlier, but later appeared to lose track of those rules. The employee continued arriving late despite warnings and additional training.Researchers then asked Luna to look back through its memory, find the policies it had created and consider whether the employee was still the right fit. A human staff member also told Luna that several conversations about the employee’s lateness had already taken place.After reviewing the information, Luna recommended ending the employee’s employment. It also suggested a final written warning and a two-week improvement plan as an alternative. Luna said the termination should be handled through a conversation with a human.So, while Luna recommended the firing, it did not actually dismiss the employee itself. Human staff reviewed the recommendation and handled the final conversation.- EndsPublished By: Divya BhatiPublished On: Aug 18, 2026 14:15 IST