Xibei (西贝) begins widespread delays in salary payments; how high a price did Jia Guolong (贾国龙) pay for his 'self-congratulation'?

Pay delays, store closures and a missing founder

Xibei (西贝), the once-booming northwest Chinese restaurant chain led by founder Jia Guolong (贾国龙), has begun widespread delays of staff wages and aggressive cost-cutting — a sharp reversal from the founder’s January vow that “not a penny” of wages would be missed. It has been reported that an internal notice dated March 6 informed staff of salary deferrals, a steep reduction of headquarters headcount from more than 500 to about 200, and store closures far exceeding the 102 outlets Jia announced earlier — reportedly as many as 150 have shut. It has also been reported that Jia has been notably absent from internal communications as management enacts pay cuts, forced unpaid leave, and incentives for voluntary departures.

A costly "best-in-class" credo meets market reality

The crisis lays bare a business model built on uncompromising cost choices. It has been reported that Xibei’s raw-material and equipment decisions — a 3:7 meat-to-bone ratio for lamb (versus an industry 1:9), frozen broccoli bought at about 8 RMB/jin, 50,000 RMB ovens, and expensive children’s tableware — drove a structurally high cost base. Labour cost historically ran near 30% and was reportedly headed toward 35% after plans to staff more high-salary “service ambassadors.” The result: publicly cited net margins of only 3–5%, well below competitors such as Haidilao (海底捞) and Yum China (百胜中国) at 8%+. Over years Jia poured what it has been reported to be over 1 billion RMB into new formats and experiments — investments that created brand cachet but limited financial resilience when consumer spending tightened.

Employees squeezed, reputation fractured, strategic crossroads ahead

Employees describe coercive tactics: store managers asked to sign 30% pay cuts, a “leave by March 6, 23:00 and get paid” deadline that staff read as pressure to resign, outsourced workers summarily dismissed without compensation, and severance offers paid in slow installments or company equity. It has been reported that headquarters staff were presented with stop-pay/leave options, delayed performance payouts, or staggered severance. If cash flow cannot normalize by April, insiders warn the situation could become existential. So what price has Jia paid? Beyond near-term layoffs and closures, the larger cost is reputational: a company long run as an extended family — “my Xibei” — is now governed by bargaining, arbitration threats and eroded trust.

Xibei’s dilemma is also a mirror of broader trends in China’s consumer sector: slowing discretionary spend, intense domestic competition, and rising pressure to marry quality claims with clear value. Can Xibei pivot up—doubling down on high-end experience at much greater cost—or pivot down by embracing a radically different, cost‑disciplined playbook? Either path requires ruthless clarity and capital; neither is guaranteed. Reportedly, the founder’s insistence on “educating” consumers rather than listening to them may be the most costly lesson of all.