Taiwanese sneaker maker PouYuen Vietnam, the largest employer in Ho Chi Minh City in terms of workforce, will axe more than 2,000 jobs this month.
The subsidiary of Taiwan-based Pou Chen Group currently has about 50,500 workers, according to labor officials in HCMC's Binh Tan district, where PouYuen Vietnam's shoe factory is located.
According to the labor officials, the reason for the lay-offs is a decline in large orders last year. The company has said it had tried its best but could not guarantee jobs for such a large number of employees while there was no guarantee of upcoming orders.
The firm has submitted a plan to its parent company to support those workers with 88% of their basic monthly salaries for each year of employment.
According to PouYuen Vietnam, its production is facing many difficulties caused by the global economic recession.
In 2023, PouYuen will not renew contracts for about 3,000 people who have worked for 1-3 years due to fewer orders, said a report by Binh Tan district officials.
Therefore, HCMC's administration asked the district officials to closely watch production and employment at the company. The administration urged related units to coordinate with workers to provide timely support, and job centers will assist in finding new jobs.
In late 2022, PouYuen started giving nearly 20,000 employees a day off each week due to a lack of orders.
In June 2020, the company terminated labor contracts with more than 2,800 workers and paid them a severance allowance worth one month's salary for each working year. Many workers who had worked for 17-18 years received VND150-180 million ($7,600) each.
At the end of last year, HCMC reported that more than 110,000 workers had been laid off or had their hours cut due to reduced orders, of them 6,300 lost their jobs.
The city's trade union said that workers' jobs will continue to be affected in 2023 as orders in some industries and businesses are predicted to drop 40%, with prices down 20%.