They Fired 107 Graduates, Paid Them Off, and Apologized 3 Times. Why Is Everyone Still Angry?

Why Xingyu’s Punishments and Payouts Didn’t Quiet the Backlash

On Aug. 24, “Xingyu coerces graduates into quitting” trended. By Sept. 7, the company had issued three public statements, one internal accountability notice, and paid 15,000 yuan to each of the 107 graduates it had hired and then pushed out. The crisis PR checklist was nearly complete. The public was not satisfied.

The penalty math

Zhou Xiaoping’s 2025 salary was 1.1 million yuan. Li Shujun’s was 750,000 yuan. The company’s 2025 revenue was 15.257 billion yuan. Net profit was 1.624 billion yuan, up 15.32 percent. Zhou’s stake in the company is worth billions.

Deducting one year of her salary is like scooping a bucket from a pool.

The penalty is not painless in absolute terms. It is painless relative to the damage. When a company with more than 1.6 billion yuan in annual profit punishes its top executive for a major reputational crisis by cutting one year of pay, the public translates that into three words: a slap on the wrist.

The HR director’s case is stranger. Changzhou’s human resources bureau said on Aug. 25 that it had suspended the “human resources director.” Media then found that the title did not appear in Xingyu’s public management structure or its Hong Kong prospectus. Yu Zhiming’s name was not released until the Sept. 7 notice. The local bureau later said Yu was a retired rehire and that the HR director role was not part of public disclosures.

A retired rehire, in a role outside public disclosures, became the front line of accountability. Deputy General Manager Li Shujun “no longer oversees human resources.” That phrasing implies he did oversee it before. So who proposed the reassignment and reduction plan? Who approved it? Who executed it? The notice does not say.

Dahe News asked three questions after the first apology. They remain unanswered. What exactly was the decision error? Who is responsible? Is the compensation a legal duty or conditional relief? How will the company prevent this from happening again?

Three apologies and one notice later, the answers are still general.

The anger is empathy

If this were an isolated hiring mistake, the story would have faded. What kept it alive is that every detail feels familiar.

Leaked recordings describe a two-option meeting. Graduates could sign a resignation letter citing “personal reasons” and receive half a month’s pay. Or they could refuse and be reassigned to the assembly line, tightening screws and doing basic operations, with pay reset to hourly worker levels. The meetings also included warnings that refusing to cooperate could affect industry background checks.

The method avoids legal hard edges. A voluntary resignation is not an unlawful termination. A reassignment to a line job at lower pay may be legal if the contract allows it. If the worker quits, it is still a “personal reason.” The law may not catch it. Morally, it is corrosive.

The 107 included 75 undergraduates and 32 master’s students. Thirty-nine were in research and development roles covering optics, structure, and electronics. Sixty were in manufacturing. Eight were in functions. A master’s degree, one month on the job, and the choice is sign or screw.

Every office worker recognizes a version of this. The anger goes beyond sympathy for 107 people. It comes from recognition. A company with 15.257 billion yuan in revenue and growing profit will still treat young workers this way. If a profitable leader does this, smaller firms have even less reason to behave better.

The fear is structural. It is not just about one company. It is about what the job market now expects from anyone who needs a paycheck.

The ESG report becomes evidence

In March, Xingyu published its first ESG report. It said the company had employee rights protection and human rights risk management. It cited employee communication rooms and worker representative systems. The chairman wrote about protecting employee interests and building harmonious labor relations. The report listed employee welfare, talent development, and employer responsibility. The company had also received employment and social security awards.

After the layoffs, the report became an exhibit. The paper mechanisms and the real “we’ll affect your background check” gap show a governance system that exists on paper only. Xingyu’s social responsibility score is 4.94 out of 10, mid-pack. That may be generous now.

Overseas clients responded. Mercedes-Benz BPO called the layoffs “serious ethical and labor misconduct” and said they did not meet supplier standards. The WB number means a supplier compliance review has been opened. Xingyu moved from normal partner to risk under review. Volkswagen replied that it would investigate and act based on findings.

Volkswagen has supply chain complaint mechanisms, media monitoring, risk analysis, and sustainability ratings. If a supplier fails sustainability requirements, it may not be eligible for new contracts. Anrong Credit Rating president Lu Dan said that if a labor dispute is found to violate a supplier code, consequences range from compliance inquiries and paused contract renewals to suspended orders or removal from the approved supplier list.

For a company embedded in the global auto supply chain, ESG is moving from bonus points to entry ticket. Xingyu serves global clients with compliance standards while handling workers with old methods. That split is the root problem.

The Hong Kong IPO and the cost to the global story

On July 29, 2026, Xingyu filed again with HKEX, three days after its first application lapsed. On Aug. 14, it received a CSRC filing notice for up to 44.8 million H shares. The CSRC filing is valid for one year, so the company must complete the H-share issuance by Aug. 15, 2027.

The layoffs happened in late July and early August. Guojin Securities chief analyst Zhou Jianbing said the incident directly hits the Hong Kong listing and short-term listing is unlikely. HKEX has moved the complaint to the listing division for review. If HKEX asks about labor disputes, it adds uncertainty.

More damaging than a delay is the client compliance review. For a company pitching a global story to international investors, being marked as “risk under review” by core clients is worse than a short-term stock drop. Scale can grow fast. Technology can catch up. Modern corporate governance has no shortcut.

What Xingyu should do

The penalties, payouts, and apologies are stop-the-bleeding measures. They are necessary. They are not healing. If the wound is still infected, a scab hides rot.

First, make accountability real. Publish the full decision chain. Name who proposed, who approved, and who executed the reassignment and reduction plan. Do not hide behind “management misjudgment.” Match penalties to responsibility. Consider an independent third-party investigation and a public report.

Second, turn ESG from a report into governance capacity. Xingyu has the documents: an employee rights policy, grievance channels, a worker congress. What it lacks is a mechanism that lets those rules affect decisions before they happen. Make labor rights a veto item in management decisions. Let employees, especially new hires, reach decision-makers without going through HR. This is a compliance floor for overseas markets, not a nice-to-have.

Third, replace “hire in boom, cut in bust” with long-term workforce planning. Hiring 440 and cutting 107 within a month shows a broken link between hiring and business forecasting. Passing that cost to fresh graduates is the worst option legally, ethically, and commercially.

Fourth, stop fighting the public. On Sept. 2, Zhou apologized and said the company had reported some media reports as false. A CEO apologizing and complaining about media in the same event sends a mixed signal. If the complaint is about factual errors, clarify them publicly. If it is about critical coverage, it will only burn the remaining trust.

Xingyu became a milestone not because its methods were new. It became one because a profitable, HK-IPO-bound industry leader used them. When a profitable company does this, public anger is not just emotion. It is structural trust collapse. No penalty, apology, or payout can repair that alone.

Xingyu must prove it has changed at the root. That proof will take a long time. It is the only way out.