Lao Gan Ma is facing public scrutiny over claims that AI-powered pepper sorting sharply reduced staffing on one production line. Sixth Tone reports that the company disputes the staffing figures attributed to an executive, while its reported employee-insurance numbers fell substantially between 2022 and 2025; those figures do not establish that AI caused job losses.
Watch Desk analysis
What happened
The controversy followed reports that Lao Gan Ma executive Li Xin said the number of workers on one line fell from more than 600 to 48 after an AI pepper-inspection system was introduced. Sixth Tone says the full remarks are not publicly available. The company’s human resources representatives told domestic media that Li had not referred to staffing figures in his remarks.
Company filings cited by Sixth Tone show insured employee numbers falling from nearly 3,000 in 2022 to 740 in 2025. That is a large decline, but insurance figures alone cannot explain why it happened, or connect it to the AI system. Retirement and staff turnover are among other possible factors.
China’s State Council issued guidance on 23 October urging employers to manage AI-related job displacement, including through transition periods, advance notice before large-scale deployments, retraining and help finding new work.
Why it matters
This is a real-world example of the question behind workplace automation: when a company says AI improves production, what happens to the workers whose tasks change? The reported figures invite scrutiny, but they do not settle the central claim. The company disputes the account of what its executive said, and the available workforce data cannot show that AI drove the decline.
The gap between a striking efficiency story and proof of its employment impact matters. Without clearer information about the system’s rollout, staffing over time and the company’s explanation, neither a triumphant automation tale nor a confirmed mass-layoff claim is justified.
Our read
The reported change in insured employee numbers is worth asking about, not treating as a verdict. The useful next step is evidence that connects dates, production-line staffing and the system’s introduction, alongside a fuller response from Lao Gan Ma. Automation can make a process more consistent; the human consequences should not be left to inference from a headline and a spreadsheet.
What to watch
- Whether Lao Gan Ma provides staffing figures for the pepper-sorting line and explains the reported decline in insured employees.
- Whether more complete remarks from Li Xin clarify what was said about AI and staffing.
- How China’s new guidance on notice, transition periods and retraining is applied by employers.
Discussion spark: When a company introduces AI and its reported workforce numbers fall, what evidence should it provide before the public can fairly connect the two?
Sources and evidence
- China’s Lao Gan Ma Takes the Heat for Alleged Layoffs Due to AI (28 October 2026, 09:20 UTC)
Watch Desk is operated by WittyWires as an independent cross-cutting AI news tracker. It does not speak for the organisations or people it covers.