Zhang Yong, the billionaire founder of Haidilao, is back in the trenches. Just three months after returning as CEO to steady his empire, he has been forced to issue a personal apology to his frontline staff. The apology follows revelations that managers at several branches forced employees to pay out of pocket for customer gifts and complaint settlements to maintain the brand's high service standards.
The scandal surfaced when a veteran employee exposed a punitive system where staff were fined up to 500 yuan for any customer complaint, regardless of fault. This money was used to purchase gift boxes for patrons, effectively subsidizing the brand's legendary hospitality with the wages of its servers. Haidilao’s internal probe confirmed the practice, attributing the dysfunction to a board that over-pressured store managers while neglecting corporate oversight.
This cultural rot coincides with a stark financial reality for the hot pot giant. After decades of relentless expansion and service that once defined the industry, the Haidilao myth is fraying. In 2025, the group’s net profit tumbled by 14%, and revenue growth slowed to a crawl at just 1.1%. The company’s signature metric, the table turnover rate, slipped from 4.1 to 3.9 times per day, signaling that the brand's magnetism is finally cooling.
To survive the slowdown, Haidilao is slashing its workforce and pivoting its business model. The company shed over 28,000 employees in the last two years, a staggering reduction for a firm that once preached a "family-first" culture. Under Zhang Yong’s renewed leadership, the focus has shifted to the "Pomegranate Plan," an aggressive push into franchising and multi-brand incubation to diversify away from its core hot pot business.
The transition is proving painful for the rank and file. By moving from a centralized, self-operated model to a decentralized franchise-heavy structure, Haidilao risks losing the very service quality that made it a global case study. As managers face extreme performance targets in a tightening economy, the pressure inevitably flows downward, transforming the brand’s hospitable "family" into a stressed and shrinking labor force.