Jia Guolong, who has always been at the forefront, is now fighting for survival by stepping back. Before the Spring Festival, Jia Guolong resigned as CEO of Xibei's main brand, with former CEO Dong Junyi returning to the position. Dong joined Xibei in 1992 and rose from an apprentice to store manager, division head, and eventually CEO of Xibei's business division. An employee noted that Dong has a better understanding of frontline operations, which could help stabilize morale. In addition to Dong, another veteran, Zhang Zhongqi, who advanced from head chef to division leader, has also returned to headquarters to help address the crisis.
This change comes less than two years after Jia’s last high-profile return to leadership. The seasoned restaurateur’s自救 efforts extend further. Recently, Xibei announced internally that due to a significant decline in business, many headquarters employees would be placed on standby—receiving only the minimum wage—or laid off.
A affected headquarters employee revealed that the company offered three options: unpaid leave, partial performance bonuses for 2025 followed by voluntary resignation, or termination with "N" times compensation, though the latter would be paid in installments over a year or possibly converted into equity. Originally, Xibei’s headquarters had over 500 employees; after this round of layoffs, the number is expected to drop to around 200.
Beyond the headquarters, store closures and layoffs are advancing rapidly. In mid-January, Jia Guolong held an internal meeting in Hohhot, announcing the closure of 102 stores. However, the actual scale of closures is reportedly much larger. Before the Luo Yonghao controversy, Xibei had approximately 350 stores. A store employee stated that 150 have already been closed, while a former executive indicated that the closures have barely begun, with internal discussions focusing on how many stores must remain to ensure survival. Even strategically important locations would not be renewed if they were unprofitable.
A店员 in a second-tier city described a three-step process for dismissing store employees: first, appealing to emotions by highlighting the company’s past generosity to encourage voluntary resignation; second, applying pressure by transferring employees to other stores—failure to report within three days results in termination for absenteeism; third, offering incentives, such as a 2,000 yuan compensation after resignation. These drastic measures—mass headquarters layoffs, store closures, and staff reductions—represent Jia’s last resort. Many insiders believe that if Xibei’s cash flow does not turn positive by April or if自救 efforts show no clear results, the situation could become very dangerous.
In 2025, an unexpected舆论战 pushed the 37-year-old Xibei to the brink. While表面上 these are 180 days of Jia’s自救, they reflect six years of misalignment within the company.
Over these 180 days, Xibei’s efforts have focused on three areas: cost-cutting, fundraising, and operational restructuring. Beyond reducing payroll, Xibei has downsized its office space. In 2020, the headquarters moved to Beijing’s Shougang Sports Building, known for its luxurious and spacious design. By the end of 2025, this office lease had expired. The ground floor now serves as an exhibition hall, recently hosting a Tibetan culture New Year event, while the 20th-floor office stands empty, bearing only the company’s name and an anti-corruption notice.
Remaining employees are scattered across locations: the fourth floor of Beijing’s Liuliqiao flagship store, a courtyard at the former "Ninety-Nine Domes" site, and a new office in Hohhot. In a rare move, Jia has welcomed primary market investors, offering more favorable valuations to secure funding. A consumer investor noted that Xibei’s adjustments require additional capital, and Jia hopes investors will trust him to navigate the challenges.
Employees are also being tapped for funds. In late 2025, Xibei sought investments from city managers and headquarters staff, promising dividends tied to net profits. Jia and his wife guaranteed a minimum 6% return if profitability falls short. This contrasts with Xibei’s previous investment window around 2020 for "Jia Guolong Kung Fu Cuisine," which attracted widespread interest but ultimately relied on internal financing. In 2021, an employee stock ownership plan was launched, with many investing eagerly amid expectations of a 2026 IPO. However, Xibei did not pursue mainstream primary market financing; instead, it secured investment from New Trend Media in 2025 through an equity-for-advertising swap.
Currently, Xibei faces significant financial pressures, including 300 million yuan spent on consumer vouchers post-controversy. With cash reserves dwindling and costs from operational adjustments and store closures, fundraising remains critical. In a January financing round, investors included Zhang Yong, founder of Xin Rong Ji, and former Alibaba partner Hu Xiaoming, whose support appears more personal than strategic.
Operationally, Xibei is rethinking its main brand’s strategy amid ongoing organizational changes. Key leaders had begun departing before the Luo Yonghao incident, and the decentralized division structure has given way to centralized control. Jia has publicly outlined new directions: reducing average spending per customer by 20%, scaling back expansion, shifting food preparation from central kitchens to stores, and enhancing children’s meals and birthday services. However, frontline staff see little improvement thus far. With Dong Junyi back as CEO, further changes are expected.
The crisis predates the recent controversy. Of the 102 stores slated for closure, over half were already unprofitable or underperforming due to limited brand influence or rising rents. A former mid-level manager observed that Xibei began declining after 2019, with some malls refusing lease renewals citing the brand’s aging image. During its peak from 2015 to 2018, Xibei’s third-generation stores—featuring open kitchens—were highly sought after by top shopping malls, sometimes even enjoying rent-free terms. In 2018, the chain opened 110 stores, exceeding internal targets, and distributed 80 million yuan in bonuses. However, the pandemic strained cash flow, and coupled with消费降级, foot traffic declined noticeably from 2024 onward. Jia acknowledged that post-2024, business deteriorated, emphasizing the need to close unprofitable stores to protect margins. With many leases expiring after 5–8 years, rising costs and falling revenues created a precarious situation, exacerbated but not caused by the recent舆论战.
Some veteran employees believe a turnaround was imminent before the controversy. Jia’s return to the main brand in early 2025, focusing on core operations rather than new ventures, was seen as a positive shift. His strategy emphasized service and emotional value to maintain Xibei’s mid-range positioning. He argued that盲目内卷价格 was unwise and prioritized quality over scale. Initiatives like differentiated children’s meals were poised for expansion but were halted abruptly. Had Jia remained distracted by new ventures, Xibei might have declined gradually, but his return offered a chance for recovery—until the舆论战 intervened like a falling stock.
Objectively, the controversy may have been the final trigger rather than the root cause. Luo Yonghao’s criticism highlighted Xibei’s high prices, such as a 21-yuan steamed bun. While the company’s overall毛利率 is around 70%—similar to peers like Xiaocaiyuan and绿茶—its net profit margin is only 3%–5%, below competitors like Haidilao and Yum China, indicating cost-control issues. Jia’s insistence on premium inputs is evident: free bibs costing 4 yuan each, 400-yuan children’s tableware, and 50,000-yuan ovens for lamb chops. Similarly, lamb selections are top-tier, with meat-to-bone ratios costing five times more than industry norms. Yet, consumers may not value these premiums, especially in a消费降级 era. Frozen broccoli, defended by Jia as high-quality with rapid turnover, faces skepticism, much like a大连 seafood buffet’s failed液氮冷冻 promotion. Consumers prefer fresh, affordable options, and Xibei’s cost structure clashes with current demand.
Jia also prioritizes employee welfare, paying above-market wages—a practice that raised人力成本 to 30%, potentially reaching 35% with new "happiness ambassadors." This exceeds even service-heavy Haidilao’s costs. While intended to create a virtuous cycle of employee and customer satisfaction, the model struggles when business sours. Jia once stated that贵 is not an issue if value is delivered, but today, price is the primary consumer complaint.
His relentless pursuit of excellence once impressed investors like张磊, but now, reevaluating costs and pricing is urgent. However, as a老员工 noted, Jia’s江湖豪气 defines him more than commercial pragmatism. Making things affordable is unfamiliar territory for Jia, who spent a decade exploring new formats aiming to put Xibei on every street globally. The "Jia Guolong Kung Fu Cuisine" project epitomized his spendthrift approach, with over 100 million yuan annually on R&D, buying top recipes, and building factories. Despite ambitions to be the "Uniqlo or IKEA of food," the venture faltered. Subsequent efforts like "Chinese Burger" and "Small Pot Beef" saw rapid launches and closures, costing over 1 billion yuan cumulatively—equivalent to years of profits. A former employee attributed failures to top-down decision-making and loose spending despite weak sales.
High consumer prices further alienated customers. A Beijing location that became "Small Pot Beef" then closed, replaced by budget chain Chaoyixing. Locals found prior offerings overpriced, such as 5-yuan rice portions. Internal reviews had limited impact when Jia deemed prices reasonable.
Xibei’s generosity extends to员工, with Jia viewing them as the core product. Training included financial management and philosophical sessions, fostering talent that later launched successful chains like湘先生米小姐 and陈鹏鹏潮汕菜. Despite current challenges, many alumni root for Xibei’s recovery. Jia’s motto, "见山开道，遇水架桥," reflects his daring leadership, but where it leads now is uncertain.
Consumers and investors urge change, even transformation. A recent investor saw promise in Jia’s return to core operations, cost-optimization potential, and stated focus on customer preferences. However, doubts remain about Jia’s commitment to humility versus educating consumers. Adapting to消费降级 challenges long-held beliefs and requires significant effort. While some advocate price cuts, a former employee warns that lower margins could be fatal. Instead, competing effectively at 80–100 yuan per customer might be wiser than entering price wars. At a crossroads, Xibei must either justify its premium with superior value—a costly, difficult task—or embrace affordability, contradicting its legacy. As one insider noted, Xibei’s initial success stemmed from talented collaborators around Jia, but those stars have dimmed. Once poised for a major IPO, Xibei’s上市 dreams have faded. Survival hinges on Jia’s ability to change first.
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