Your Hibiscus has Dieback Disease. The causes of dieback include environmental stresses such as winter injury, drought, and salt damage, wood-boring insects, vascular wilt diseases, and herbicide injury. Soil compaction, excavation that damages the roots, vole damage to roots and root disease can also result in dieback of branches or entire plants.
Start by removing the mulch, aerate the soil well with a hand cultivator and keep the soil loose under the canopy. Everytime it rains or you water, return and aerate the soil 2 inches deep.
What you can do to the tree is cut all the dead wood off and prune any wood that's rubbing limb on limb. Keep all the leaf litter picked up. Just changing the soil and removing dead growth will give the tree chance.