Workers worry about pink slip as global economic woes dry up orders

“Everyone goes to work with a constant worry, not knowing who will be fired next,” she says.

She returns home at 9 p.m. after four straight shifts. “Our company does not have new orders, and so people have to manage existing ones.”

She works for a steel company in the southern province of Long An that does not have enough cash flows to pay salaries and so is laying off workers gradually.

Those still with jobs have to work harder and harder.

Ngoc works overtime, but does not get extra pay though the law requires payment of 150-300% of normal wages for overtime.

“My salary is VND250,000 (US$10) per day. My overtime rate remains the same. But I don’t dare quit since I don’t know what to do next.”

Ngoc is one of many workers worried about losing their job amid the fewer orders due to rising global inflation and economic instability.

The Long An Province Trade Union of Industrial Parks recently reported that more than 4,100 workers in local industrial parks have been sacked or had their working hours reduced.

In another province next to HCMC, Binh Duong, some 28,000 workers have been laid off without compensation so far this year, and 240,000 others have had their working hours cut.

In Ho Chi Minh City, 2,858 workers have been let go from 27 companies.

More than 61,400 people in Hanoi applied for unemployment benefits in the first 10 months of this year, up 14% from the same period last year, according to the Hanoi Employment Service Center.

The HCM City Business Association said a number of textile and apparel businesses have had to downsize their workforce and production as a result of lack of orders and financial challenges.

As the pandemic faded away orders had surged from the fourth quarter of 2021, and this lasted until July this year.

But recently consumption has declined drastically as a result of high inflation, particularly in Vietnam’s major textile and apparel export markets such as the U.S. and E.U.

The conflict between Russia and Ukraine has had a significant impact on logistics and raw material costs. Some 95% of textile and apparel exports to Russia have come from Vietnam, but shipments have fallen by 42% during the conflict.

Other challenges that businesses must deal with include the strengthening dollar, rising oil prices and surging bank interest rates.

Le, a garment worker in Binh Duong, has also been particularly worried since her company has laid off close to 1,000 employees in recent months.

Those remaining are rotated due to the lack of orders at the moment.

She says: “There is far less work to do. It will take us just two to three hours to complete the work. The salary is not enough for daily expenses, but I don’t know where to apply for a new job right now since all companies are facing the same challenges.”

Mai, a worker at a leather footwear company in Ho Chi Minh City, is not so lucky and is set to get a pink slip this month.

She says: “Many of our company’s products are unsold. Frequently buyers complain about and return products, which causes the inventory to swell. Before Covid sometimes I would not have time to relax, but now I spend way too much time not working.”

Most people are trying to retain their jobs at least until Tet so that they can get the annual bonus.

“After a year of hard work, everyone looks forward to the Tet bonus to take care of our family. If I quit now, there will be no Tet bonus, and getting a new job at year-end is incredibly difficult.”

A loan package worth VND10 trillion ($402.37 million) out of a total of VND20 trillion has been urgently rolled out to provide immediate support to workers at industrial parks across the country since tens of thousands are losing their jobs or having their working hours and wages reduced.

The union is also making an effort to assist workers during this Lunar New Year.

The Binh Duong Province Confederation of Labor is trying to mobilize resources along with union funding to support workers through the difficult period until they can return to work.

Le and other workers hope things will get better in the new year.

The Bac Giang Province native says she will try to stay at this job at least through Tet. She feels luckier than others for still having a job though it does not pay too well.