Hangzhou court rules companies cannot replace staff with AI, offering potential relief to landlords

A court in Hangzhou, described as China’s AI capital, ruled in late April that companies cannot dismiss employees and replace them with artificial intelligence. The decision may come as a relief to workers in a city known for its technology sector—and to commercial landlords who depend on human tenants to fill office towers.

Hangzhou is home to Alibaba, one of China’s largest tech companies, which reports a total payroll of 128,000 employees. A ruling that curbs direct substitution of staff with AI could ease anxieties among workers in the metropolis and help sustain demand for traditional office space.

For local property owners, the reasoning is straightforward: AI agents do not occupy desks. After a period of soft demand in parts of China’s commercial real-estate market, any measure that maintains or supports office-based employment may be welcome. The court’s decision underscores how China’s technology hubs are navigating the rapid adoption of AI while balancing workplace stability.

For now, landlords and employees in Hangzhou have reason to view the ruling as a positive signal, even as broader market and regulatory conditions continue to evolve.