PouYuen Vietnam, a Taiwanese footwear maker and the largest employer in Ho Chi Minh City by workforce, will lay off 5,744 employees in June and July.
PouYuen attributed the move to a decline in orders, while the firm had already reduced the working hours of 20,000 staff since the end of 2022 and furloughed 2,358 in February.
The downsizing is equivalent to over 10% of its workforce before the Covid-19 pandemic and is considered the biggest cutback since its establishment in HCMC in 1996.
In a meeting with local authorities, the company affirmed it would not dismiss workers who are pregnant, people with disabilities, and laborers with children under 12 months old unless they are willing to resign. It will also provide full compensation for workers.
HCMC has instructed Binh Tan district, the municipal labor federation, and relevant agencies to assist Pou Yuen workers, such as processing insurance claims, providing vocational training, and offering alternative jobs.
In the first quarter, the gross regional domestic product (GRDP) of HCMC, Vietnam's economic powerhouse, grew a mere 0.7% year-on-year, the lowest among the country's five centrally-run cities. The four others are Hanoi and Hai Phong in the north, Danang in the central region, and Can Tho in the Mekong Delta.