Low demand leads to 6,000 jobs cut in Vietnam shoes market

According to Vietnamesse state media report on Saturday, one of Vietnam’s largest shoe manufacturers for brands such as Nike Inc and Adidas AG would cut thousands of jobs at the end of next month, due to significant orders decrease.

Vietnam is among the world’s largest exporters of clothing, footwear and furniture, but has been badly affected by the cost-of-living crisis in Europe and the US, with the buying power of consumers shrinking.

PouYuen Vietnam Co, a unit of Taiwan-based Pou Chen Corp, told local authorities that it would lay off almost 6,000 workers with permanent contracts from the end of next month.

“This will be the biggest layoff since PouYuen started its operation in Ho Chi Minh City in 1996,” it said.

The firm is among the commercial capital’s largest employers, with about 50,000 workers.

In February, the firm had a similar move of letting go of almost 3,000 permanent staff, and a further 3,000 temporary employees did not have their contracts renewed.

A third of production facilities in the city experienced reduced workforce demand in the first quarter of this year, a survey by Ho Chi Minh City’s labor department showed.

The downturn mostly affected shoes, clothing, and construction industries, officials said.

PouYuen put 20,000 of its workers on paid leave in the rotation last year.

In the meantime, more than 630,000 workers lost their jobs or had their hours cut in Vietnam last year, the Vietnamese Ministry of Labor, Invalids and Social Affairs said.

Source: Taipei Times, AFP