One pepper-sorting line that once needed more than 600 people to get the chillies sorted now runs on 48, and the company that owns it wants that number treated as fiction. Third-party filings show the wider business shed 2,175 insured employees in four years while revenue climbed to an all-time high. The denial is real. It is also considerably smaller than the thing it denies.
Lao Gan Ma is not a startup and does not get the benefit of the doubt. It is the Guizhou chilli crisp in the red-and-yellow jar, a condiment so embedded in Chinese daily eating that its absence from a kitchen reads as a statement. On Monday, 26 October, its hotline staff told Chinese media that reports of mass layoffs tied to AI production were false, that the company had never published such figures, and — the part that mattered — that the affected line “never employed that many workers” to begin with. CNA carried the denial alongside the confirmation that AI inspection is genuinely in use across its production bases.
The rumour it was answering had been circulating for days: a pepper-sorting workforce above 600 reduced to 48 people doing the final experience-based pass, after an AI visual inspection system went in last year. The South China Morning Post logged the 600-to-48 version as it moved across Weibo. By Wednesday one hashtag on the dispute had drawn more than 120 million views, and the comment sections had stopped being about chilli oil.
Li Xin — He Took the Receipt to a Government Conference and Read It Out as Good News
The figure did not leak out of a disgruntled employee. It came out of a microphone. Li Xin, the company’s executive vice-president and chief quality officer, described the automation at a provincial government conference in Guizhou in late September: defect rates on key processes down to 0.02 per cent, AI visual inspection fully deployed, and 2025 revenue at a record 5.4 billion yuan, roughly 810 million US dollars.
In the same remarks, according to state media accounts, he put the staffing change on the record — a line that once carried more than 600 workers, now carrying 48.
That is the whole case, and it did not require a subpoena. Nobody at Lao Gan Ma is alleged to have written a cruel memo. An executive stood in a government room built to celebrate industrial modernisation and told the room that 552 jobs on a single line were now handled by software and cameras. The announcement the company now says never happened was delivered as a success story, in public, with revenue attached. Silence would have been defensible. A conference slide is testimony.
Tao Huabi — You Cannot Spend Forty Years Selling the Hands and Then Bill the Customers for the Robot
The backlash has a specific shape, and it is not about efficiency. Lao Gan Ma built its authority on origins: a woman in Guiyang selling noodles and a chilli dip, bottling the dip, and turning it into a national staple without ever pretending the product came from anywhere grander than a kitchen. CNA notes the company has long cultivated an image rooted in working-class origins. That image is not decoration. It is the pricing power.
Which is why the Weibo response read less like a labour dispute and more like a breach of contract. “This is so ironic coming from a company that has benefited greatly from working-class people,” one user wrote. Another was blunter: lay off the workers, and the products come off the shelves.
Chinese consumers are not naive about automation. The threads carried plenty of people arguing that inspection by AI is a food-safety gain, that consistency beats fatigue, that a bad batch of chilli oil is its own kind of harm. The fight is over who absorbs the transition. A brand that sells itself as the taste of an ordinary household cannot answer that question with a hotline statement and a shrug.
2,175 — The Number Lao Gan Ma Has Not Denied, Because It Cannot
Here the story stops being a public-relations problem. Third-party business registration data put Lao Gan Ma’s social-insurance enrolment at 2,915 people in 2021. By 2025 it was 740. BigGo Finance assembled those figures against the company’s own automation claims, and the two sets do not contradict each other. They complete each other.
The company has confirmed AI inspection. It has not explained reassignment, severance or compensation at any scale. Reporting around the dispute describes some workers moved into warehousing and packaging, a few long-serving staff retained for re-inspection, and a substantial share who were seasonal contract labourers whose contracts simply were not renewed. None of that is confirmed on the record, and “not renewed” is the quietest layoff ever invented: no announcement, no package, no number to deny.
So hold both facts without flinching. AI did not fire 2,175 people in an afternoon. The headcount fell while output and revenue rose — precisely the outcome every food manufacturer in the country is being told to chase, and one Guizhou has already blessed. The province’s 2025 list of exemplary digital-transformation cases includes Lao Gan Ma’s automated filling lines as a model to copy.
A company can be truthful that its pepper line never had 600 bodies on it and still be the case study for what happens to the people who did work there.
Guiyang — The Women Who Sorted Peppers Are the Only Party Without a Spokesperson
Follow the cost to a street. The accounts of the dispute place most of the affected workers as local women from around the company’s Guiyang base — the kind of job that in a provincial capital is not a career but a household’s second income, taken because it is walkable and the shift ends before school pickup. Sorting peppers by hand is dull, repetitive, cold-fingered work. It was also, for a lot of households, the reason the arithmetic worked.
Those women have no press office. The company has a hotline. The executive has a conference stage. The consumers have 120 million views and a boycott threat that will evaporate the moment somebody runs out of chilli oil at dinner.
Every displacement story lands in the same place: the efficiency is measured to two decimal places, and the human cost is measured in a rumour nobody can verify, because the only institution holding the payroll data has decided that explaining it is worse than being accused.
Every Food Manufacturer in China — Watching Whether Outrage Costs More Than a Statement
This is the test case and it will be read as one. Guizhou has already published the automated filling line as a provincial exemplar; other provinces will follow with their own lists, because the incentives run one way. Defect rates down to 0.02 per cent, record revenue, a headline about modernisation. The only variable still in play is whether public anger becomes a cost line.
If the fury fades in a week, the lesson lands as automate, deny the number, keep the jar on the shelf. If it sticks — if a brand that owns the working-class origin story starts losing shelf space over it — then the next province’s exemplar list acquires a paragraph on workforce transition that nobody currently bothers to write.
Lao Gan Ma will survive this. Chilli crisp is not a category that punishes a company for long. The 740 people still on the insurance rolls will keep showing up, and the rest will look for work in a city where the biggest employer just proved the line runs without them. The company says the 600-to-48 figure is false. The cameras do not need to be asked.
Sources: CNA, South China Morning Post, BigGo Finance.