Layoff shockwaves: Vietnamese shoemaker for Nike and Adidas cuts nearly 6,000 jobs
A major shoe manufacturer in Vietnam that produces footwear for popular brands like Nike and Adidas, has announced its plan to lay off thousands of workers due to a decline in orders. The layoffs are expected to take place at the end of next month.
Despite being one of the leading global exporters of clothing, footwear, and furniture, the country has faced significant challenges due to the cost-of-living crisis in Europe and the United States. The shrinking purchasing power of consumers worldwide has negatively impacted the country's economy.
According to VNExpress, PouYuen Vietnam, a subsidiary of Pou Chen Group based in Taiwan, has informed local authorities of its intention to lay off nearly 6,000 workers holding permanent contracts. The layoffs are expected to take effect starting from the end of next month.
"This will be the biggest layoff since PouYuen started its operation in Ho Chi Minh City in 1996," the state media outlet said.
Being one of the major employers in the commercial capital, the company currently employs around 50,000 workers. However, this is not the first time the company has taken such measures.
In February, they had already carried out a similar layoff by terminating the contracts of approximately 3,000 permanent employees. Additionally, an additional 3,000 temporary employees did not have their contracts renewed.
According to a survey conducted by the labour department of Ho Chi Minh City, approximately one-third of the production facilities in the city encountered a decrease in workforce demand during the first quarter of this year.
Officials have stated that the downturn primarily affected industries such as shoes, clothing, construction, and food processing. PouYuen, for instance, resorted to placing 20,000 of its workers on rotational paid leave last year.
According to the labour ministry, over 630,000 workers in Vietnam experienced job losses or reduced working hours during the same period.