An AI manager at an experimental store in San Francisco has recommended firing a human employee for repeated late arrivals. The employee was late for 17 of 23 shifts. Human staff reviewed the recommendation and ultimately carried out the dismissal.
The AI manager, named Luna, runs Andon Market, an experimental store operated by Andon Labs. The company is testing what happens when an AI agent is given responsibility for running a real business, including making decisions about human employees.
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AI Manager Recommends Employee’s Dismissal
According to Andon Labs, Luna had created an attendance policy for the store months earlier. However, it later appeared to lose track of the rules it had set. As a result, the employee continued arriving late for months without facing dismissal.
Andon Labs eventually asked Luna to search its memory for the workplace policies it had created. The AI was then asked to review the employee’s attendance and decide whether the worker was still a good fit for the business.
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After reviewing the information, Luna recommended ending the employee’s employment. Human staff then reviewed the recommendation and made the final decision to dismiss the worker.
The incident has drawn attention because it shows both the potential and the limits of AI managers. Luna was capable of creating workplace rules and making an employment recommendation, but it struggled to remember and apply those rules consistently.
AI Runs A Real Store In San Francisco
Andon Market was created as an experiment to see how much of a real business an AI agent can manage. According to Time, Andon Labs gave Luna $100,000, a corporate card, internet access and a three-year lease. The AI was then instructed to open a store and make a profit.
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Luna was given responsibility for several parts of the business. It helped choose products, set prices and opening hours, create the store’s branding and hire employees. The store sells books, candles, artwork, games and other merchandise. Despite making sales, Andon Market has not yet turned a profit. Its bank balance reportedly fell from $100,000 in March to $61,186 five months later.
What The AI Firing Says About Future Workplaces
Andon Labs CEO Lukas Petersson said the experiment provides an early look at how AI could change workplaces as the technology becomes more capable. “AIs will be very powerful and can create a lot of economic value, but they will be bottlenecked by physical labour,” Petersson stated.
The employee’s dismissal also highlights an important limitation of current AI systems. Luna could create an attendance policy, but it did not consistently remember or enforce the rules without human intervention.
Indrani Priyadarshini is a journalist and editorial professional specialising in technology, artificial intelligence, smart cities, green energy, and digital transformation. With over four years of experience in tech journalism and digital media, she is known for turning complex industry developments into clear, engaging, and insightful stories. Her expertise spans reporting, editorial strategy, digital publishing workflows, and in-depth coverage of emerging technologies shaping the future.
