Hangzhou Court Says AI Cost Savings Alone Do Not Meet Legal Standard for Firing Worker

A court in Hangzhou ruled against a fintech company that fired worker Zhou after he refused a demotion and pay cut, with the company stating he could be replaced by AI. The worker had been employed by the firm to evaluate the accuracy of answers generated by AI models.

The Hangzhou Intermediate People’s Court said replacing Zhou on cost grounds did not constitute a “material change in objective circumstances,” a legal requirement for firing him.

The court stated its judgment should be seen as an “exemplary case” that could guide future rulings. “The use of AI technology is intended to free labourers, improve productivity and serve the public good,” the court said. ” The article was published on 14 June 2026.

South China Morning Post reported the case amid a surge of artificial intelligence cases in the Chinese legal system.