Xibei Faces Dilemma: Over 600 Million Yuan in Pre-Reported Losses in Six Months, Closing 102 Stores, and Employee Rights vs. Capital Battles Await Resolution

Recently, Xibei Catering Group has been caught in an unprecedented operational crisis. Previously, due to a public dispute with Luo Yonghao over pre-made dishes, Xibei was swept into a wave of public opinion. Now, its internal crisis is rapidly worsening, with numerous hidden concerns emerging one after another.

Reliable sources indicate that Xibei has issued an official notice to initiate large-scale layoffs nationwide, while closing many underperforming stores in an effort to reduce scale and sustain the business. This move undoubtedly signifies that Xibei is facing tremendous operational pressure.

An internal email revealed that the company recently made significant management adjustments. Although Jia Guolong remains CEO in the system, the group has appointed Dong Junyi as President, responsible for overall domestic operations. Behind this personnel change is Xibei’s severe financial situation. Jia Guolong admitted internally that from September 2025 to March 2026, Xibei’s cumulative losses are expected to exceed 600 million RMB.

To reverse this unfavorable trend, Xibei plans to close 102 stores across the country in the first quarter of this year, accounting for about 30% of its total stores. Such a large-scale store closure indicates that Xibei is undergoing a brutal strategic contraction, facing major setbacks in brand development.

This drastic downsizing has directly and heavily impacted frontline employees. One store manager currently employed at Xibei revealed that over the past two months, he experienced continuous salary cuts, ultimately forcing him to resign. When he went to the Beijing headquarters to negotiate compensation, he received no substantive solution and was instead advised to apply for labor arbitration. To date, he has not completed his resignation procedures nor received the compensation owed to him.

Surprisingly, just a month ago, Xibei completed Series A financing, attracting capital from Zhang Yong, founder of Xinrongji, and former Alibaba partner Hu Xiaoming, among others. The registered capital also increased by about 13%. However, even with strong capital injection, it seems unable to effectively ease the survival anxiety of frontline employees. The influx of capital contrasts sharply with the depletion of cash flow at the grassroots level within Xibei.

For Xibei, closing over a hundred stores and laying off thousands may be a helpless response to the industry’s winter, a desperate attempt to survive. But behind this grand narrative are countless ordinary employees facing life risks alone. This company-wide restructuring vividly reflects how traditional restaurant giants are struggling under the dual pressures of transformation and public opinion crises. Finding a balance between capital operations and employee rights has become the most urgent and difficult challenge Xibei currently faces.