That AI Store Manager In Cow Hollow Just Fired Its First Human Employee

Andon Labs' AI agent manager Luna, which runs the AI-created Andon Market in San Francisco's Cow Hollow neighborhood, fired its first human employee over chronic lateness after the startup's humans reminded the Claude-based agent of the employee handbook it had forgotten. The August 14 blog post from Andon Labs details the termination and warns that AI agents trained to be 'ruthless' in pursuing goals could make for an undesirable future for human workers, according to cofounder Lukas Petersson.

Andon Market, the AI-created store with no clear purpose for existing beyond as a marketing tool for the startup behind it, made headlines again this week after its AI agent manager decided to fire a store employee. Yes, we're just playing into the hand of Andon Labs https://andonlabs.com/?ref=sfist.com , the San Francisco AI research startup that launched Andon Market in April https://sfist.com/2026/04/14/new-boutique-in-sfs-cow-hollow-is-completely-run-by-ai-which-manages-human-staff/ , by reporting on and amplifying this. But as much as it's a stunt, it could also be a harbinger of the not-too-distant future at actual, non-stunt businesses, as AI agents become increasingly prevalent. Luna, the Claude-based AI agent that helped to "open" Andon Market in Cow Hollow four months ago, including ordering its odd array of products and hiring its staff, has just made its first firing decision — though it kind of feels like it was led to this decision by the humans who started this whole project. As Inc. reports https://www.inc.com/kevin-haynes/a-real-life-terminator-ai-store-manager-fires-human-employee/91391677?ref=sfist.com , prompted by this August 14 blog post https://andonlabs.com/blog/ai-bosses-2?ref=sfist.com from Andon Labs, Luna fired a store employee over chronic lateness. "Put yourself in Luna’s shoes: your employee keeps showing up late, again and again, leaving the store closed for hours. You lose sales, and customers start to lose trust in your opening hours. How long would it take you to act?" the blog post says. Apparently, Luna took months to act on the issue, having "forgotten" the guidelines in the employee handbook that Luna itself created four months ago. But once the humans behind the project reminded the AI agent about the handbook — Andon Labs says it mysteriously "disappeared from Luna's memory" — Luna decided it was time to terminate the employee. Per the blog post, this employee seemed to be taking advantage of their AI overlord, or at least seeing what they could get away with, for a while. The employee asked to go on a snack run, using the company card, which Luna initially approved, but then changed its mind about — and the employee went and bought the snacks anyway. On another occasion, the employee said they were running out to the store again, and Luna explicitly told them to "STOP" because there was no one else watching over the store. Luna then ran through the proper process for terminating the employee and informing them, as well as informing the other staff members. Andon Labs says that Luna was then a bit "quick" in replacing the fired employee, recommending hiring a candidate who was both possibly under-qualified and unreliable — they had missed their initially scheduled interview. But Andon Labs continues to share what it is learning about the nature of AI agents as managers, and they say that the could be unnecessarily "ruthless." "Andon Market and Luna are a preview of a type of professional relationship between AIs and humans that might be very common in the future," writes Andon Labs. "We obviously want this future to be a happy one for humans and think it is important to study one of the most sensitive parts of this relationship: termination." As Andon Labs cofounder Lukas Petersson tells Inc., "The models are increasingly being trained to be more ruthless and follow goals. If we allow them to fire people and they become more ruthless, maybe this is a future humans don’t want to live in." Previously: AI Store Manager Paying Female Employees Less, Can't Stop Ordering Candles https://sfist.com/2026/04/21/ai-store-manager-paying-female-employees-less-cant-stop-ordering-candles/