Hangzhou Court Bars AI-Only Layoffs, Backs Worker After 40% Pay Cut on April 28

According to Bloomberg, on April 28, the Hangzhou Intermediate People's Court ruled that employers cannot fire workers or cut pay solely because AI has automated their roles. The court backed compensation for a worker whose pay was cut by 40% and was dismissed after refusing reassignment when AI took over his job.

The court said AI adoption does not qualify as a legal basis to terminate employment contracts under China's Labor Contract Law, which permits dismissals only in narrow cases such as major external changes like natural disasters or mergers. The ruling reflects China's approach of promoting AI development while maintaining labor stability.