A Chinese auto parts maker has apologized for firing 107 recent university graduates just weeks after they began working, stating that four managers had been disciplined following public backlash. 

In an apology published on its website on Sept. 7, the company, Changzhou Xingyu Automotive Lighting Systems, based in the eastern Jiangsu province, said the decision to reduce staff and reorganize positions was “incorrect.” It admitted it had caused “immense physical and psychological harm to the students” and “a serious negative impact on their families and society.”

The company also announced disciplinary measures against four managers, including withheld salaries and reassignments. It said it had dismissed its human resources director, while the head of the human resources department had been demoted and transferred. However, domestic media later reported that the company had no such human resources director at the time of the incident.

Xingyu is one of China’s major automotive lighting equipment manufacturers, producing 80 million headlights per year. It also supplies international automakers such as Volkswagen, Mercedes-Benz, and BMW.

During a university campus recruitment drive earlier this year, the company signed employment agreements with 440 students set to graduate in 2026, and later hired 372.

According to its apology, however, company management decided in July to reorganize staff and reduce its workforce based on order outlook and staffing needs.

The company said that in early August, its human resources department approached 140 of the 372 new employees and informed 33 that they would be allowed to remain in their original positions. The remaining 107 signed termination agreements.

Of the 107 terminated employees, 75 held bachelor’s degrees and 32 had master’s degrees. Sixty worked in manufacturing, 39 in research and development, and eight held other roles such as quality control and project engineering.

A recent graduate who was among those terminated by the company told domestic media outlet Beijing News that they were given only two options: to “voluntarily” sign a resignation agreement for “personal reasons” or be forcibly transferred to a manufacturing line position. The graduate said they also were not offered additional compensation for the sudden termination.

The move sparked widespread backlash online, with users noting that in China, “recent graduate” status applies only in the first two years following graduation and is voided upon employment. To improve employment prospects for recent graduates, many junior positions are available only to those with “recent graduate” status, meaning such positions are no longer available to them once terminated.

On Aug. 25, local authorities said they deemed Xingyu to have used “simple and harsh” methods and failed to communicate sufficiently and effectively with employees.

In its apology, Xingyu said each of the 107 terminated workers would receive 15,000 yuan ($2,200) to ease their living costs while seeking new employment. The company added that it would offer free accommodation in its dormitories and help connect them with other employers. Those who remain unemployed by the end of November will also receive compensation equivalent to six months of their previous salary.

As of Sept. 7, 71 of the recently terminated employees had found new jobs, the company said. Local employment authorities have also organized special recruitment events and recommended positions to those affected by the cuts.

Volkswagen, Mercedes-Benz, and BMW separately confirmed to domestic media that they had received details on the matter and launched their own investigations into Xingyu.

“Respecting the legitimate rights and interests of workers is a core principle that the Volkswagen Group adheres to in all its business activities,” a Volkswagen spokesperson told domestic media. “This principle also applies to the management of our supply chain system, and we require that all fundamental values and rights be fully guaranteed.”

Circulating screenshots also showed that Mercedes-Benz responded to an anonymous report regarding the incident via email, stating that Xingyu’s behavior was “inconsistent with Mercedes-Benz’s corporate principles” and that it intends to forward the report to the relevant department for further review. 

Editor: Marianne Gunnarsson.

(Header image: VCG)