Meta Faces Lawsuit Over AI-Driven Layoff Decisions

Employees challenge algorithmic workforce cuts

A group of 26 current and former Meta employees filed suit this week alleging the company's artificial intelligence systems discriminated against workers on protected leave during its May layoffs, which eliminated roughly 10% of the workforce.

The legal complaint, filed Monday in the United States Northern District Court of California, centers on what attorneys describe as Meta's "constellation of internal artificial-intelligence systems" used to determine which employees to cut. According to the filing, these systems relied on performance ratings, productivity metrics, "AI-native" ratings, and AI-token consumption—data points that workers on medical or family leave could not accumulate.

The plaintiffs argue that because their metrics declined while on approved absences, the AI systems effectively targeted them for termination. The lawsuit alleges violations of protected-leave laws and discrimination statutes related to pregnancy and disability, according to CNBC, which first reported the filing.

Why it matters

This case represents one of the first major legal challenges to AI-assisted workforce management at a major tech company. As organizations increasingly deploy algorithmic tools for employment decisions, the lawsuit highlights a fundamental tension: systems optimized for productivity metrics may systematically disadvantage employees exercising legal rights to medical and family leave. The outcome could establish precedent for how companies must design and audit AI systems that influence employment decisions.

Meta denies AI made termination decisions

A Meta spokesperson rejected the allegations outright. "The claims lack merit and are not based on facts," the company told CNBC. "Workforce management and organizational decisions were and are made by people, not AI."

The plaintiffs are seeking a preliminary injunction to maintain their employment status while requesting an independent audit of Meta's "algorithmically assisted selection process." They intend to pursue individual claims through arbitration.

Broader legal landscape for AI employment tools

The Meta lawsuit arrives weeks after a California federal judge ruled that Workday must face claims about its AI-powered job screening services. In that case, plaintiffs alleged the company's recruiting software violated discrimination laws—claims Workday denied, stating its technology evaluates only job qualifications, not protected characteristics.

These parallel cases signal growing legal scrutiny of AI systems in employment contexts, particularly around questions of disparate impact on protected groups. The legal framework remains unsettled as courts grapple with how existing employment law applies to algorithmic decision-making.

The specific allegation about AI-token consumption as a performance metric is notable. Token usage has emerged as a common measure of AI tool adoption within organizations, but the lawsuit suggests such metrics may create unintended discrimination when applied to workforce decisions without accounting for legitimate absences.

Details of the lawsuit were first reported by CNBC and Courthouse News Service.