Roughly a year after Luo Yonghao publicly criticized Xibei, the renowned restaurant chain is confronting a fresh wave of turmoil. Employees who have left the company are voicing strong discontent over postponed compensation, alleging that founder Jia Guolong is prioritizing the launch of new business ventures over settling outstanding financial obligations.
Multiple former employees from Xibei's headquarters have reported that the promised salary payments and severance packages, initially slated for July of this year, have been rescheduled under a new agreement. The revised plan extends 2025 year-end bonuses to be paid in five installments by the end of 2026, while severance payments are now deferred in stages until 2028. This decision was communicated during an online meeting with departing staff, where Jia Guolong asked for their trust in the company's recovery, stating that payments could not be made promptly.
One employee, who left in April, revealed that a supervising manager phoned to inform them the new terms were mandatory, not open for negotiation. This individual states that Xibei still owes approximately 140,000 yuan in unpaid bonuses and compensation. Faced with these unilateral changes, several former workers have opted to file for labor arbitration.
Simultaneously, Xibei's store closures continue to escalate. Data indicates that as of mid-August, the company operates only 228 locations, a reduction of over one hundred stores compared to the period before the pre-made food controversy last September. The brand has completely withdrawn from cities including Foshan, Chongqing, and Yancheng.
Amidst these operational challenges, Jia Guolong has been actively developing new restaurant concepts, launching "Tianbian Claypot Braised Noodles" and "Tianbian Yangduo" within the past year. This strategic move has sparked anger among some former employees, who question the use of their unpaid compensation to fund these ventures. They argue that if successful, the founder reaps the benefits, while they bear the financial risk.
The roots of this crisis trace back to a major workforce adjustment that began in late February. At that time, employees were informed of salary cuts and delayed wages, with the company initially unable to provide lump-sum severance. An initial agreement was reached, detailing a salary deferral policy starting in March, which stipulated partial payments based on income brackets and set a schedule for bonus and severance distribution. However, this agreement was not honored.
Employees report that they were recently notified of a revised blueprint. The new arrangement delays the 2025 year-end bonus to be paid in five equal installments by the end of 2026, with interest accruing at 8% per annum after a specified date. Severance payments are to be made in phases between 2027 and 2028, with interest accruing from July 2026. Despite these detailed terms, employees like Xiao Tang, who is owed about 140,000 yuan, express frustration that even the specific payment dates are now ambiguous, noting that only a portion of funds was received after their departure.
Beyond unpaid wages, staff are entangled in disputes over share buybacks. Xibei had previously raised capital from employees in two rounds. The first was in 2021, encouraging investments from management-level staff ahead of a planned IPO. Another fundraising effort occurred at the end of last year in the wake of the pre-made food controversy, with some employees feeling pressured to invest to secure their jobs. However, after the crisis, many have found it impossible to get their share buyback requests approved, unless they choose to resign.
In contrast to the workers' struggles, Xibei has recently completed a Series A funding round, attracting investment from notable figures including Zhang Yong of Xin Rong Ji and Hu Xiaoming, a former Alibaba partner. The company's registered capital has also increased.
Jia Guolong has previously forecast operating losses exceeding 600 million yuan for the period from September 2025 to March 2026. He had confirmed plans to close 102 stores in the first quarter, impacting nearly 4,000 employees. While he promised that wages would be fully paid, reports indicate salary cuts at the store level have been implemented since February. Staff at existing locations also report reduced headcounts and irregular payment schedules for temporary workers.
Despite efforts to attract customers with price reductions and vouchers, the business has not shown significant recovery. The store count continues to decline, with some locations closing outside of the initial plan. For instance, a Xibei store in Guangzhou closed in late August due to "strategic adjustments." The brand has also fully exited several cities, and nationwide store numbers have plummeted by roughly 35% over the past year.
Looking to the future, Jia Guolong has expressed hope that new brands like "Tianbian" will absorb some of the closed stores and their staff. However, this strategy has fueled further resentment. Disgruntled former employees argue that if the company is insolvent, it should undergo liquidation, rather than using their deferred compensation to finance new entrepreneurial risks. The uncertainty is compounded by instances of a new "Tianbian" braised noodle store in Nanjing reverting to the Xibei brand after a few months of operation, with management citing limited menu choices.