Lao Gan Ma denies AI replaced hundreds of workers after viral online backlash

Centre · 2Lao Gan Ma, the Guizhou-based chilli sauce maker, has denied online claims that it replaced hundreds of factory workers with artificial intelligence, after the claims spread on Weibo and prompted boycott threats. 1 2 Centre · 1The claim circulating on Weibo from Monday (26 October) was that the company had cut its chilli-sorting workforce from more than 600 people to 48 after installing an AI-powered inspection system. 1 Centre · 2The company's response, given to Chinese media on Monday, confirmed it uses AI for quality inspection but said mass layoffs were false. A representative, described by the South China Morning Post as a human resources employee speaking to Ifeng, said: "We have never employed that many workers." 1 2

Centre · 1The origin of the figures is described differently. CNA says Li Xin, the company's executive vice-president and chief quality officer, told a provincial government conference that AI had cut defect rates and helped lift 2025 revenue to a record 5.4 billion yuan (US$810 million). CNA adds that he reportedly said the workers on one production line fell from over 600 to 48 after an AI pepper inspection system was introduced last year. 2 Centre · 1The South China Morning Post reports that Li Xin, whom it calls executive deputy general manager and chief quality officer, said at the 2026 Guizhou Provincial Quality Development Conference that AI visual inspection was fully introduced in 2025, according to Guizhou Daily. It says the original Guizhou Daily report contained no staffing figures and that later reports added unverified numbers. 1 Centre · 2The two outlets also give different timings for the conference: CNA says late September, while the South China Morning Post says earlier this month. 2 1

Centre · 2Reaction on Weibo was split. Some users accused the company, which has cultivated a working-class image, of putting profit ahead of workers; one hashtag had passed 120 million views by Wednesday, and some users threatened to boycott the products. Others defended the change as routine industrial upgrading that could improve food safety, quality and productivity. 2 1 Centre · 2The row comes as Beijing pushes AI adoption while trying to protect jobs. The South China Morning Post says the "AI Plus" plan targets 70 per cent adoption in strategic sectors by 2027 and 90 per cent by 2030, several AI-linked labour disputes have emerged this year, and the State Council last week urged caution and advance notice to staff before large AI roll-outs. 1 2 Centre · 1Kyle Chan of the Brookings Institution said the reaction was striking because Lao Gan Ma is "probably the furthest thing from people's minds when thinking about AI". He said firms risk tapping into anxieties that the official state narrative downplays, and argued that worker protections could go further, such as requiring firms to find alternative roles for displaced staff. 1

Centre · 1The company did not answer repeated calls to its headquarters seeking further comment on Wednesday. 1