Taiwan footwear giant PouYuen to further reduce 1,231 jobs in August

PouYuen Vietnam, a Taiwanese footwear maker and the largest employer in Ho Chi Minh City by workforce, will conduct its third layoff this year later this month, cutting 1,231 jobs.

HCMC Department of Labor, War Invalids and Social Affairs released the information Wednesday, attributing the issue to the giant's lack of business orders.

The layoff is set to commence this Saturday and the firm eyes to complete all relevant procedures in September.

PouYuen Vietnam will make severance payments equivalent to 80% of the monthly salary for each year of working at the firm.

So far, this is the fourth furlough of Pou Yuen, after the first one in June 2020 with about 2,800 people. The next ones, also the first and second layoffs of PouYuen this year, were in February and May, cutting more than 2,300 and 5,744 jobs, respectively.

PouYuen is a subsidiary of Taiwan’s footwear giant Pou Chen. Vietnam produced 33% of Pou Chen Corporation's footwear in the first quarter of this year, making it the second biggest production hub for the global leader in the athletic, athleisure, casual and outdoor footwear sector. In total, Vietnam produced 17.97 million pairs of shoes, though the portion was down from 35% in Q1/2022, according to a report by the Taiwan-based firm.

Vietnam’s production for Pou Chen peaked in 2020 with 46% of the firm’s total output, but fell to 35% in 2021 during the Covid-19 pandemic, and recovered to 38% in 2022 as its factory resumed normal operations and demand returned.

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 of 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.