"炒鱿鱼 (chǎo yóu yú)" originally referred to the fried squid, a delicious dish in Chinese cuisine. However, it has been a common slang meaning "being fired" (解雇, jiě gù) in Chinese today.
In the old days, people took along their bedrolls when leaving home for a job. Thus, when they were fired, they had to roll up and take away their bedrolls with them. So "卷铺盖走人 (juǎn pù gài zǒu rén, pack up one's bedrolls and leave the workplace)" was provided with the meaning of "be fired". These sacked people were sensitive to such harsh words as "解雇 (jiě gù)" or "开除 (kāi chú)", so they said "卷铺盖 (juàn pù gài)" instead.
Over time, people found that a squid would curl up when fried, and that the action for a squid to roll up was similar to that of rolling up beddings, so, they replaced "卷铺盖 (juǎn pù gài)"with "炒鱿鱼 (chǎo yóu yú)" to express "be fired". Now, people often use "炒鱿鱼 (chǎo yóu yú)" in a funny way to say that they are laid-off.
tā fàn le dà cuò, suǒyǐ bèi gōngsī chǎo yóuyú le.
He was fired by the company because he made a big mistake.
Besides meaning "be fried", "炒鱿鱼 (chǎo yóu yú)" can also be used in the case when one tenders the resignation on his or her own initiative. This situation can be described by "炒老板鱿鱼 (chǎo lǎo bǎn yóu yú)" which means something like "to fire the boss".
zhège gōngzuò wǒ bú gàn le, wǒ chǎo le lǎobǎn yóuyú.
I quit the job and fired my boss.
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