In Beijing’s 798 arts district a new noodle restaurant has opened with none of the red-checkered tablecloths or children’s entertainers that made Xibei a recognisable high-street brand. Named Tianbian and serving sandpot braised noodles in a near-thousand‑square‑metre two‑storey space, it is legally owned by the same corporate group that controls Xibei and carries menu items that will be familiar to regulars. Staff in the restaurant admitted some former Xibei employees have been transferred there, but the decor and outward branding deliberately make no reference to the chain’s founder, Jia Guolong.
The inconspicuous launch speaks to a wider manoeuvre. Since mid‑January Xibei — once a poster child of China’s large, founder-driven mid‑market dining chains — has quietly closed scores of outlets, cut staff and deferred wages as it confronts mounting losses. Jia, who in January declared he would return to frontline operations and eschew personal branding, has largely vanished from public view; by the Lunar New Year he had relinquished the CEO role of Xibei’s flagship brand and taken an apparent backstage position while the group’s former chief executive, Dong Junyi, stepped back in to stabilise operations.
The scale of Xibei’s retrenchment is stark. Jia disclosed in mid‑January that Xibei planned to close 102 outlets — roughly 30% of its national portfolio — affecting about 4,000 employees. The group reported cumulative losses exceeding RMB 600 million from September 2025 through March 2026. Across the country, long‑standing restaurants — some with more than a decade of operation — have been shuttered as management seeks to stop cash outflows and rebuild a leaner cost base.
Operational shifts have been swift and blunt. Dong has ordered management salary cuts, imposed a store‑manager accountability regime, scrapped the company’s much‑touted inter‑store incentive competitions and paused large‑scale employee training programmes — including the troupe of in‑house “magicians” used for children’s birthday events. Store‑level wages and cooks’ pay have been reduced by about 30% with the promise of conditional reinstatement as losses shrink, and there are widespread reports of delayed wage payments and minimal severance when staff depart.
Beyond payroll, Xibei’s supply and production infrastructure is being pared back. The chain has already closed central kitchens in eastern and southern China, preserving only a northern hub, a change Jia himself acknowledged as part of post‑pandemic retrenchment. Legal disputes connected to a Shanghai central kitchen have increased, and head‑office functions and supplier relationships are contracting as the company attempts to convert fixed costs into more manageable, localised operations.
If the restructuring is partly about cost control, it is also about capital. Traditional venture capital pipelines have dried up for restaurants, and an initial public offering is no longer a plausible near‑term exit. Xibei’s latest funding came from investors in Jia’s personal network rather than institutional backers: a February subscription by Inner‑Mongolia entrepreneur Lin Lairong of roughly RMB 2.25 million bought just over a 2.16% stake, and a January round added funds with ties to long‑standing industry acquaintances, including an investment vehicle linked to the founder of the Taizhou restaurant group Xinrongji. Those injections appear designed to plug immediate liquidity holes rather than to underwrite a growth spurt.
For staff on the ground the shift has been traumatic. Employees across multiple provinces reported forced departures, salary cuts, deferred payroll and little or no severance. Stores that once supplied family incomes have become sources of uncertainty; administrative notices offering “standby” arrangements at minimum wage through August make clear the group is prioritising cash preservation over employment stability. The human cost is compounded by damage to brand goodwill at a moment when consumer demand is fragile.
Xibei’s predicament matters beyond one chain. It is a barometer for China’s broader mid‑market dining sector, which expanded aggressively on a model of scale, standardisation and founder‑led marketing during the post‑pandemic recovery. When footfall drops and capital markets cool, that business model — with heavy labour and property commitments and high fixed costs such as central kitchens and entertainment programmes — becomes vulnerable. How Xibei repositions itself will be watched by rivals, creditors and landlords and may presage a period of consolidation in China’s restaurant industry.
For now the group’s strategic options appear limited. Short‑term survival depends on trimming the estate, slashing costs and extracting quick capital from private backers. Longer‑term recovery will require rethinking menu economics, revising labour models, repairing employee relations and rebuilding consumer trust. Whether a backroom retreat by the founder and a return to a more managerial, less personality‑driven brand can arrest a deepening decline remains an open question.