Meta faces lawsuit over AI-driven layoff claims

Meta is facing a lawsuit from 26 former employees who say the company used AI-powered assessment tools to unfairly select them for layoffs during a broader round of cuts affecting 8,000 employees in May.

According to the complaint, the company relied on tools including productivity scores, AI token usage tracking, and an internal LLM called Metamate to rank workers ahead of the layoffs. The plaintiffs allege those systems penalized employees who had missed work or were expected to produce less because of medical conditions, maternal leave, and other disability-related circumstances.

The former employees argue that these decisions violated federal and state anti-discrimination laws. They also claim the systems were not properly screened for bias, which they say breached laws in California and New York City.

Recommended reading

How Spin Master Went From Sawdust to PAW Patrol

Meta denies the allegations. Responding on X, company spokesperson Andy Stone wrote:

“This is patently untrue. Full stop.” “Workforce management and organizational decisions were and are made by people, not AI.”

The lawsuit lands after Meta said its continued AI investments were part of the backdrop for the staff reduction. Mashable also reports that employees who remained at the company had raised concerns about a newly launched tracking tool called the Model Capability Initiative (MCI), which was meant to train AI models using employee activity. Those employees alleged MCI was gathering more data than initially disclosed, raising questions about possible violations of European data laws.

The plaintiffs are asking a California federal court for a preliminary decision that could pause their termination, which is currently set for July 22, while the dispute moves through private arbitration.