Vietnam's Garmex Saigon Corporation (GMC) cut 1,797 employees in the first quarter of this year to 185, less than one tenth of the number at the beginning of the year.
In Q1, the company, one of the leading textile and garment exporters in Ho Chi Minh City, spent about VND15 billion ($639,800) on labor costs, while in the same period last year, it spent more than VND112 billion ($4.78 million).
Garmex Saigon recorded a loss of nearly VND21 billion ($895,700) on a net revenue of VND8 billion ($341,200) in Q1, down 94% year-on-year. The company said the main reason was a lack of orders.
Garmex Saigon was established in 1976, mainly manufacturing and exporting pre-made clothing. Its major customers are Decathlon (France), Columbia (U.S), Cutter & Buck (U.S.), Teijin Frontier (Japan), New Wave (Sweden), Nits (Japan), etc.
In 2022, although the first two quarters of 2022 recorded positive results, the decrease in demand in the second half of the year severely affected the results of most businesses, including Garmex Saigon.
Garmex Saigon's revenue was only VND292 billion ($12.45 million) in 2022, down nearly 73% compared to 2021, the lowest revenue in 16 years. The company reported a loss of VND85 billion ($3.6 million), the first loss since it came into operation.
The firm's GMC shares, listed on the HCMC Stock Exchange (HoSE), closed the Thursday trading session at VND9,050 ($0.39).
According to the General Statistics Office, in the first four months of 2023, fiber exports reached only $1.28 billion, down 33.6% year-on-year, while textiles and garments dropped 19.3%, hitting approximately $9.6 billion.
The Vietnam Textile and Apparel Association has outlined two growth scenarios for 2023. The positive scenario is a turnover of $47-48 billion, while the less positive scenario is about $45-46 billion.