Lao Gan Ma Denies AI Layoff Claims Amid Online Backlash

Credit: Imaginechina

Caption: Lao Gan Ma chili sauce

Chinese chili sauce maker Lao Gan Ma has denied claims that it laid off more than 500 workers after adopting artificial intelligence, as reports of a steep reduction in pepper-sorting staff sparked an online backlash.

The controversy followed remarks by Li Xin, the company's executive deputy general manager and chief quality officer, at a quality development conference in Guizhou Province this year.

China Business Herald reported that Li said a production line previously had more than 600 pepper-sorting workers but retained only 48 after the system went into operation. Those remaining workers carry out a final check drawing on their experience.

A member of the company's human resources staff told media yesterday that the claims of mass layoffs were false.

The denial did not detail what happened to the other pepper-sorting workers, leaving their employment status unclear.

Some social media users threatened to stop buying the brand's products, saying: "If you put workers out of work, we'll get your products taken off the shelves."

The AI visual inspection system uses cameras to identify damaged peppers and impurities. At the company's Changming production base in Guiyang, cameras scan a conveyor belt every 0.3 seconds, with jets of air directing blemished peppers into a waste bin.

The system covers raw-material sorting, production quality control and supply-chain scheduling. The defect rate at key production stages fell to 0.02 percent following its introduction.

Li also said the company's 2025 revenue reached a record 5.4 billion yuan (US$810 million) after four years of quality improvements and system optimization, Jiemian News reported.

The angry reaction centered on concern for workers' livelihoods as the company highlighted gains from automation. Lao Gan Ma's founder, Tao Huabi, was herself a laid-off worker who sold cold rice noodles before building the chili sauce business, a background closely associated with the brand's appeal to ordinary working people.