Suppose a woman in her late forties has spent a decade at a belt in a Guizhou factory, picking out split and blackened chillies by eye and by touch. The scene is an illustration, not a report on anyone named in the sources. One morning in October she sees the phrase “600 to 48” on her phone, attached to the company whose jars she has packed for years, and she does the arithmetic on her own line before she reaches the end of the sentence.

The phrase comes from a talk at the 2026 Guizhou Quality Development Conference, held last month. According to Sixth Tone, multiple domestic outlets reported that Li Xin, executive vice general manager and chief quality officer of Lao Gan Ma, China’s best-known chilli-sauce brand, said the number of workers on one production line fell from over 600 to 48 after an AI pepper-inspection system arrived last year. He also credited the system with near-zero production errors and noted record 2025 revenue of 5.4 billion yuan, about $810 million. Sixth Tone adds that his full remarks are not public.

What the system does

Yicai Global reported the story on 15 October. In its account, cameras scan the conveyor belt every 0.3 seconds, and a jet of air blows defective peppers into a waste bin within another 0.3 seconds. Li said the defect rate at key stages of production fell to 0.02%, and Yicai reports that more than 600 chilli-sorting workers were reduced to 48 who remain for a final check based on experience. The system was deployed across all the company’s factories in 2025, Yicai says, and covers raw-material sorting, quality control and supply-chain scheduling.

The record, though, is thin. Yicai lists the company’s revenue from a Guizhou top-100 ranking: 5.28 billion yuan in 2022, 5.38 billion in 2023, 5.39 billion in 2024, then 5.4 billion in 2025. A record, yes, but by a margin close to rounding. If the figures hold, the system produced a cleaner product and a smaller payroll rather than a larger business.

The denial

The reaction was fast. By Wednesday a Weibo hashtag on the affair had passed 120 million views, Sixth Tone reports. Some users called automation a normal part of industrial upgrading. Others asked what the company owed its workers. One comment that drew many upvotes asked who would buy the goods if people had no jobs or income. Others reposted a call for a boycott: “If you lay off workers, we’ll get your products pulled from the shelves.”

The brand makes the charge sting. According to a commentary in The Paper, quoted by Sixth Tone, founder Tao Huabi was herself a laid-off worker who sold cold rice noodles from a street stall before she started the company in 1997, and her portrait is on every jar.

On 26 October, Sixth Tone says, the company’s human-resources representatives told domestic media that Li had not mentioned staffing figures. Phoenix News went further, quoting a company staff member who said the company had “never used this many workers” and that the claim of a drop from 600 to 48 was untrue. The staff member confirmed that AI quality inspection is live at the production base. The same Phoenix report relays unverified online accounts: that many of the sorters were local women in their forties and fifties with little formal schooling, that some were moved to warehousing and packaging, that some veterans stayed to review, and that a considerable number were seasonal workers whose contracts ended and were not renewed.

What the records can and cannot say

Without a transcript, users turned to public filings. Sixth Tone cites records on the data platforms Tianyancha and Qichacha showing that the number of employees enrolled in the company’s social insurance fell from nearly 3,000 in 2022 to 740 in 2025, a drop of roughly 75%. Phoenix, citing Tianyancha, gives 2,915 for 2021 and the same 740 for 2025.

Sixth Tone is careful to note that this does not prove AI drove the cuts. Retirement and turnover also change insurance rolls, and seasonal workers may never have appeared on them. The numbers fit the layoff story and fit a more mundane one equally well. That ambiguity is the heart of the case: the company has confirmed the technology, disputed the headcount, and published neither a payroll figure nor a before-and-after for the line in question.

Beijing’s new guidance

The timing matters. On 23 October, three days before the denial, China’s State Council issued guidelines on AI and employment. Sixth Tone quotes them as calling for “maximizing AI’s potential to create jobs, empower workers in traditional occupations, improve job quality, and stimulate innovation” while “slowing down the impact of AI-related job replacement.” Sixth Tone reports that they urge caution in labour-intensive industries, and encourage transition periods, advance notice before large rollouts, and retraining and job-finding support. Reuters, as summarised by Allwork.Space, quotes a call to “improve their systems for monitoring employment risks linked to AI and develop contingency plans.” Neither report treats the guidelines as binding rules with penalties for a specific employer.

Lao Gan Ma was not the first sign of unease. In June, state-run Workers’ Daily, the paper of the All-China Federation of Trade Unions, published an editorial asking how to build a strong “dam” for workers’ rights, arguing that the benefits of technological advance “should be shared by society as a whole”. The Next Web, which reported on it, also relays reports that a Beijing arbitration ruling in December 2025 and a Hangzhou court ruling in April 2026 held that replacing workers with AI is not valid grounds for dismissal. Those are secondhand accounts of rulings, and this article has not seen the rulings themselves.

Why a denial settles little

The episode has the pattern of earlier arguments about AI and work: an executive speaks proudly to a room of peers, the remark escapes, and the company retreats to the one claim it can contest, the number. A denial of the figure leaves open whether jobs went, how many, and what became of the people.

Picture the same woman in a Guiyang supermarket a few weeks on, jar in hand. The scene is again an illustration. The label has not changed, and nothing on it says how many hands the jar passed through. She puts it back, or she doesn’t, and either way she has no way to learn from the shelf what the company will not say.

References

  • Allwork.Space. (2026). China moves to protect workers from AI job losses with new employment guidelines. allwork.space
  • Phoenix News (Ifeng Tech). (2026). Report on Lao Gan Ma’s response to the AI layoff claims (Chinese). tech.ifeng.com
  • Sixth Tone. (2026). China’s Lao Gan Ma Takes the Heat for Alleged Layoffs Due to AI. sixthtone.com
  • The Next Web. (2026). China’s state-run Workers’ Daily calls for a ‘dam’ to protect labour rights as AI spreads. thenextweb.com
  • Yicai Global. (2026). Chinese Chili Sauce Giant Laoganma Reports Record Revenue in 2025 on AI Quality Inspection System. yicaiglobal.com