Xingyu Automotive apologizes, takes corrective measures after firing 107 graduates

A leading automotive lighting manufacturer in Changzhou, Jiangsu province issued a public apology on Monday and announced a series of corrective measures — including executive pay cuts, dismissals, and the creation of a dedicated youth fund — after terminating the contracts of 107 newly recruited college graduates just weeks after they joined the company.

Changzhou Xingyu Automotive Lighting Systems Company has pledged to put "people first" in its corporate culture, overhaul its human resources practices, and introduce third-party oversight. It also confirmed that it had already paid three months of job-seeking subsidies — totaling 15,000 yuan ($2,235) per person — to all affected employees and promised six months of additional salary compensation for those who remain unemployed after three months.

The company also took internal disciplinary action against four senior executives. General Manager Zhou Xiaoping, founder of the firm, received a one-year salary deduction. Deputy General Manager Li Shujun was reassigned and docked six months' pay. Human Resources Director Yu Zhiming was dismissed (he had been suspended earlier), and HR department head Li Mei was demoted and transferred to a different role.

The company recruited 440 graduates from the class of 2026 during its 2025 autumn and 2026 spring campus recruitment campaigns. Of these, 372 signed formal labor contracts upon graduation, while 68 chose to pursue other opportunities or further studies.

In July 2026, management decided to restructure its workforce based on revised order forecasts and operational needs — a decision the company now admits was "erroneous" and made with "poor judgment". In early August, the HR department approached 140 of the new hires for negotiations; 33 kept their original posts, while 107 signed termination agreements.

The company acknowledged that some staff handled the negotiations in a "simple and rigid" manner, causing "great distress" to the affected graduates and their families.

The incident sparked widespread public discussion after leaked audio recordings suggested that new employees were given a stark choice: resign with only half a month's salary as compensation or accept forced reassignment to frontline assembly positions with corresponding pay cuts.

The Changzhou municipal human resources and social security bureau said in a release on Aug 25 that the negotiation process lacked "adequate and effective communication", though it confirmed that the company had not improperly benefited from government employment subsidies.

Local human-resources authorities in Changzhou have organized two dedicated job fairs and provided tailored job recommendations. By midday on Monday, 71 of the 107 affected graduates had already joined new employers, 22 had received formal job offers, and the remaining 14 were either in interviews, exploring other options, or considering postgraduate studies.

Founded in 1993, the company manufactures and sells lighting products for major automakers, including Volkswagen, Mercedes-Benz, and BMW, as well as many Chinese electric-vehicle brands. The Shanghai-listed company recently filed for a Hong Kong listing to pursue an A+H dual-listing strategy.