Meta Platforms Inc (NASDAQ:META) has been sued by some employees who claim the company’s AI-assisted systems disproportionately affected workers with disabilities and those who took protected medical or family leave during its latest layoffs, allegations the company has denied.
The lawsuit was filed by 26 employees late Monday in the U.S. District Court for the Northern District of California, Oakland division, with the plaintiffs seeking to halt the layoffs while their claims proceed.
Lawsuit Challenges AI-Assisted Layoffs
“Meta did not assemble the termination list through the considered judgment of managers who knew the work,” the 71-page complaint states.
Instead, the plaintiffs allege the company relied on a range of AI-assisted systems to score, rank and select employees for layoffs, including its ‘Metamate’ large language model assistant, employee-trained ‘second brain’ agents, AI token-usage dashboards and algorithmic performance-ranking tools.
The lawsuit alleges the company failed to account for employees on protected medical or family leave before using those metrics in the layoff process.
“The result was that employees who took protected leaves were disproportionately selected for layoff, based on scoring that not only failed to account for their protected leaves, but in effect penalized the employees for exercising their legal rights to these leaves,” the complaint states.
Meta Denies Allegations
Meta Communications Director Andy Stone rejected the claims, saying workforce decisions were made by people rather than AI.
“These claims lack merit. Workforce management and organizational decisions were and are made by people, not AI,” Stone said in a post on X.
Layoffs Coincided With AI Spending
Meta began notifying about 8,000 employees, or roughly 10% of its workforce, of layoffs in May as part of a broader restructuring tied to the company’s growing AI investments.
Earlier this month, CEO Mark Zuckerberg reportedly told employees the company’s AI-driven reorganization had not progressed as rapidly as executives had expected.
On Monday, the company accelerated its AI infrastructure buildout, with the cost of its Hyperion data center project in Louisiana exceeding $50 billion.
Price Action: Shares of Meta have risen 1.63% year-to-date and fallen 8.31% over the past year. It closed 0.66% higher on Tuesday at $661.04 and edged 0.02% up in extended trading.
Benzinga edge rankings indicate Meta has a Momentum score in the 30th percentile and a Growth score in the 88th percentile.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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