Meta layoffs take disturbing turn in new lawsuit
There’s no sugarcoating it; getting laid off is awful. But if you've been following the news, it feels like tech workers are being laid off left and right. Here’s what one Reddit user, who was recently laid off from an account executive role at a tech company, had to say on the r/Layoffs subreddit: ...
Overview
There’s no sugarcoating it; getting laid off is awful. But if you've been following the news, it feels like tech workers are being laid off left and right.
Here’s what one Reddit user, who was recently laid off from an account executive role at a tech company, had to say on the r/Layoffs subreddit: “A lot of my friends in tech have also been laid off (developers, salespeople, marketers, the lot). Honestly, I'm done with tech, I'm done with corporate, and I'm done with the humiliation rituals.”
A lot of it is potentially AI, or at least that's what tech companies want everyone to believe. But there may be another, far darker possibility.
What if the technology is being used to identify who is easiest to push out?
That concern is at the heart of a lawsuit involving Meta, according to Reuters, with former employees making allegations that could reshape how workers think about AI in the workplace.
Meta allegedly used AI to penalize workers taking medical leave
According to Reuters, 26 current and former Meta employees have sued the tech giant, alleging that AI-assisted productivity systems unfairly placed workers with medical conditions or those on protected leave on its layoff list.
The complaint was filed July 13 in federal court in Oakland by employees from six states and Washington, D.C., Courthouse News reported.
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All the plaintiffs requested protected leave, sought disability accommodations, or faced alleged interference with those rights.
It’s important to note that the lawsuit doesn’t claim Meta feeds medical diagnoses into an algorithm. Instead, the plaintiffs argue the company relied on productivity signals that served as proxies for disability, pregnancy, and family leave.
Naturally, workers who were absent for medical, maternity, parental, or caregiving reasons logged fewer code commits, lower AI-tool usage, and less digital activity.
Meta allegedly treated those gaps as evidence of weaker performance or engagement without adjusting for protected leave.
For context, it goes back to Meta’s bombshell May 20 decision to slash 8,000 jobs, or nearly 10% of its workforce, according to NPR News, while pushing 7,000 employees into AI-related roles and flattening management layers.
Details
Similarly, I recently covered Microsoft’s job cuts, including 4,800 immediate layoffs and a deeper restructuring across its Xbox gaming division. Xbox is also expected to slash 3,200 positions through fiscal 2027, with several studios being spun off or moved toward new ownership.
Moreover, Meta made use of a “constellation” of AI-assisted tools instead of a single layoff algorithm.
Here’s what those tools included:
- MetaMate, Meta's internal AI assistant, as Business Insider noted
- Employee-built "second brain" AI agents
- Performance calibration systems
- AI token usage leaderboards
- Code commit data
- Broader digital activity signals
Meta has denied the allegations, saying the lawsuit lacks merit and that people, not AI, made the final workforce decisions.
What laws is Meta accused of violating?
- Medical and family leave: The complaint alleges FMLA and California Family Rights Act interference and retaliation, arguing Meta treated protected absences as a negative factor.
- Gender and pregnancy discrimination: Plaintiffs invoke Title VII and the Pregnancy Discrimination Act, alleging intentional discrimination and an unjustified disparate impact on women and caregivers.
- Disability and accommodation: Claims under the ADA and Pregnant Workers Fairness Act accuse Meta of disability discrimination, retaliation, and failing to provide pregnancy or disability accommodations.
- California AI rules: Plaintiffs cite FEHA’s automated-decision regulations and Pregnancy Disability Leave Law, arguing neutral algorithmic inputs produced discriminatory outcomes.
- Additional state protections: The filing also brings claims under Washington, New York, New York City, D.C., Florida, and Illinois civil rights or paid leave laws.
Source: Does 1 Through 26 v. Meta Platforms, Inc., complaint filed July 13, 2026, Counts I–XVIII, via Courthouse News
What Meta could argue against the AI discrimination claims
Meta’s first and most obvious line of defense? The tech behemoth said people, not AI, made the final layoff decisions.
However, that doesn’t shield the Facebook parent from the claims that its managers were heavily reliant on flawed productivity scores, discriminatory proxy variables, or automated rankings that penalized protected leave.
There’s also the argument that those layoffs were part of a legitimate restructuring.
Roles were slashed, management layers were flattened, and resources were redirected toward AI initiatives. The potential argument could be that employees were picked not due to discrimination, but because of duplication, performance, organizational need, or strategic alignment.
For now, the big question is whether the plaintiffs can effectively connect Meta’s internal AI systems to the layoff decisions.
The complaint also identifies alleged inputs, including AI usage, code commits, performance ratings, and output, but doesn’t touch on the underlying formula, model weights, source code, or entire statistical analysis showing selection rates.
Moreover, it remains unclear whether Meta adjusted performance metrics for time away from work or applied the same process across every team.
Nevertheless, it adds to the growing skepticism toward AI, particularly among tech workers. The Meta complaint also comes after Tesla CEO Elon Musk suggested that work could become optional in a future of universal high income, sparking a reality check from noted investor Michael Burry.
Related: Citi sends powerful sign to SpaceX investors
Source
Originally published at www.thestreet.com.
