Meta faces lawsuit over alleged AI-based layoff discrimination

Meta faces a landmark lawsuit alleging that the company used AI to lay off workers based on medical conditions.

In a legal battle over the use of artificial intelligence in corporate HR, 26 former Meta employees have filed a federal lawsuit in Oakland, California.

The plaintiffs accuse the tech giant of relying on biased, automated algorithms to target vulnerable workers—including those with disabilities, serious medical conditions, or those on approved family and medical leave—for its mass layoffs.

The lawsuit alleges that when Meta executed plans earlier this year to cut approximately 10% of its global workforce-nearly 8,000 employees, it handed over selection evaluations to AI-powered performance-tracking systems.

How the AI Targeted Workers:

According to the complaint, these AI systems penalized workers using highly flawed metrics.The system heavily graded workers on digital productivity metrics, tracking activity and output.

The algorithm reportedly assessed how frequently and efficiently employees used internal AI development tools and tokens.

By relying purely on these raw, automated numbers, the AI systematically flagged and penalized employees who had missed work due to legitimate, legally protected medical leave, pregnancy, or physical disabilities.

Since the employees were away on approved leave, their digital activity and token usage naturally dropped, signaling them to the algorithm as "low performers".

The plaintiffs, who span six U.S. states, argue this process violates federal and state labor laws that strictly prohibit discrimination and retaliation against workers with disabilities or those taking approved medical leave.

The lawsuit appears to be the first against a major U.S. company to challenge the alleged use of AI in conducting layoffs.

The plaintiffs, who were notified in May that their jobs would be eliminated starting on July 22, are seeking a preliminary ruling from the court blocking Meta from completing the layoffs while they pursue their claims in private arbitration.

Meta’s Defense: 'Made by People, Not AI'

Meta has strongly rejected the lawsuit, with a company spokesperson declaring the legal claims "without merit."

“Workforce management and organizational decisions were and are made by people, not AI,” the spokesperson stated, denying that automated algorithms held the final power to fire employees.