Business · World News Bureau

Lao Gan Ma's 'AI layoffs': what the numbers really show

A claim that China's famous chilli sauce maker used AI to cut 600 pepper sorters to 48 drew more than 120 million views on one Weibo hashtag. The AI is real. The number looks unsourced. The anxiety behind it is the real story.

LSN World News · 29 October 2026

Lao Gan Ma's 'AI layoffs': what the numbers really show

<p><em>Special Reporting from LSN News, adapted from today's Asia Behind the Headlines episode. <a href="https://youtu.be/GywhiYdWcJ4" target="_blank" rel="noopener">Watch the video on YouTube.</a></em></p>

<p>More than 120 million views. That is how far one Weibo hashtag about Lao Gan Ma, one of China's best-known chilli sauce brands, had travelled by Wednesday, 28 October. The claim spreading across Chinese social media was simple and explosive: the company had used artificial intelligence to cut 600 pepper sorters down to 48, while booking record revenue. Users threatened a boycott. One comment, widely reposted, read: "If you lay off workers, we will pull products from the shelves."</p>

<p>The sting was personal. Founder Tao Huabi, whose portrait is on the brand's jars, was herself a laid-off worker who sold cold rice noodles from a street stall before founding the company in 1997, according to Sixth Tone. On X, one post on the rumour of more than 500 AI layoffs had passed half a million views by Thursday morning.</p>

<h2>What is real: the AI, and the record revenue</h2>

<p>Lao Gan Ma does use AI. The company confirmed to Chinese media that it uses AI inspection technology. Reports say high-speed industrial cameras scan peppers on the conveyor and flag mouldy or spotted ones in about 0.3 seconds. Executive vice-president and chief quality officer Li Xin said the AI visual inspection system went fully live in 2025, and that the defect rate at key production steps fell to 0.02 percent.</p>

<p>Speaking at a Guizhou provincial quality conference in late September, Li said revenue reached a record 5.4 billion yuan, about 810 million US dollars, in 2025. That figure is revenue, not profit, and it was only about 0.17 percent higher than the year before, according to the Shandong outlet New Yellow River.</p>

<h2>What is disputed: the 600-to-48 figure</h2>

<p>The number at the heart of the row is far shakier. China Daily reported that, according to the China Business Herald, Li said more than 600 workers had sorted peppers on the line before the AI system, compared with 48 after. But New Yellow River checked the Guizhou Daily's 29 September report on his speech and found no mention of either number. It traced the 600 figure to an article on a tech website on 13 October that gave no source for its staffing data. The China Business Herald piece that attributed the numbers to Li a day later was compiled from other outlets and gave no original source either. Li's full remarks are not publicly available online, Sixth Tone noted.</p>

<p>On Monday, 26 October, the company pushed back. Its hotline told Lanjing News the AI-layoff reports were false and that the company had never released such information. Human resources staff told Phoenix News that Lao Gan Ma had "never employed that many workers" on the line, and Sixth Tone reported that HR representatives said Li had not referred to staffing figures at all.</p>

<p>There is a real number, though. Social insurance records published on the corporate data platforms Tianyancha and Qichacha show that insured staff at the main company, Guiyang Nanming Laoganma Flavor Food Co, fell from 2,912 in 2022 to 1,783 in 2023, 941 in 2024 and 740 in 2025. But most of it came before the AI system fully went live, and insured headcount is not the same as layoffs: retirements, staff turnover, outsourcing or a change in which legal entity pays social insurance can all move the figure, as China Daily noted.</p>

<h2>Our read: an unsourced number, a real anxiety</h2>

<p>Our read: the viral number looks unsourced, but the anxiety behind it is real. On 23 October, three days before the company's denial, China's State Council issued guidelines to mitigate job displacement caused by AI. According to Xinhua, the plan sets 18 tasks, including a mechanism to assess the employment risks of AI adoption, and Sixth Tone reported that it urges caution in labour-intensive industries, advance notice before large-scale rollouts and retraining for displaced workers.</p>

<p>A household brand with a working-class origin story, a record revenue line and a clean before-and-after number made a perfect vehicle for a much bigger fear. Lao Gan Ma just became the test case for whether companies can explain automation before social media explains it for them.</p>

<h2>Sources</h2>

<ul>

<li><a href="https://www.chinadaily.com.cn/a/202610/27/WS6ae05098e4b06d4aa0565043.html" target="_blank" rel="noopener">China Daily, 27 Oct 2026</a></li>

<li><a href="https://www.sixthtone.com/news/1019180" target="_blank" rel="noopener">Sixth Tone, 28 Oct 2026</a></li>

<li><a href="https://www.jinantimes.com.cn/news-7-5337755.html" target="_blank" rel="noopener">New Yellow River (Xin Huanghe), 26 Oct 2026</a></li>

<li><a href="https://english.www.gov.cn/policies/latestreleases/202610/23/content_WS6adb4e53c6d00ca5f9a0deb7.html" target="_blank" rel="noopener">Xinhua via english.gov.cn, 23 Oct 2026</a></li>

<li><a href="https://x.com/kyleichan/status/2115086271383044584" target="_blank" rel="noopener">X post by @kyleichan, 27 Oct 2026</a></li>

</ul>