Korea-invested apparel firm halts layoff plan in HCMC

South Korea-invested apparel firm Nobland Vietnam Co. Ltd., located in Ho Chi Minh City's Tan Thoi Hiep Industrial Park, has halted its plans to lay off 611 workers after a backlash from staff.

Nguyen Vo Minh Thu, vice head of the Ho Chi Minh City Export Processing Zone Authority (HEPZA), made the announcement Friday. HEPZA also asked the firm, which has 2,504 workers, to base its furlough plans around the legal framework, including agreements with workers to ensure the rights of all relevant sides.

The firm’s original plan was submitted to HEPZA and HCMC’s labor department on August 7. Accordingly, the firm planned to start the process in September, providing full salary for workers and severance packages equivalent to at least two months' salary.

The firm attributed the move to post-pandemic impacts affecting the firm’s finances, forcing it to restructure. Nobland Vietnam also offered new working options for staff, but those options featured lower base salaries with a higher emphasis on bonuses.

However, workers at the firm disagreed, saying they and the labor union were not consulted about the move. They also stressed the new working options were unfair. Many expressed their willingness to continue working under their current packages.

In 2021, many workers of Nobland Vietnam joined a collective strike to protest the firm’s plan to change their payment packages, which had a stronger emphasis on bonuses.

On August 23, PouYuen Vietnam, a Taiwanese footwear maker and the largest employer in Ho Chi Minh City by workforce, said it would conduct its third layoff this year later this month, cutting 1,231 jobs. PouYuen Vietnam will make severance payments equivalent to 80% of the monthly salary for each year staff have worked at the firm. This is the fourth layoff Pou Yuen has implemented, after the first one in June 2020 when about 2,800 people lost their jobs. The first and second layoffs of PouYuen this year were in February and May, cutting more than 2,300 and 5,744 jobs, respectively.

Footwear is a major sector for Vietnam’s export-driven economy. The sector recorded an export revenue of $11.67 billion in the first seven months of this year, down 17.1% year-on-year, according to the General Statistics Office. The July figure was $1.85 billion, down 18.7%. As a result, footwear was the fifth-biggest cash earner for Vietnam in the seven-month period, after electronics, computers and components worth $30.79 billion; mobile phones and components worth $27.8 billion; machinery and equipment worth $22.9 billion; and apparel-textiles worth $18.93 billion.