HCMC’s biggest employer lays off 2,000 workers as orders plunge

In an announcement on Sunday, the company in Binh Tan District, a contractor for major brands like Adidas, Nike and Reebook, said these laid-off employees already had to stay at home for a long time after a shoe brand canceled orders last year.

The company had tried to make arrangements but could not guarantee jobs for a large number of affected workers, while futures orders are unpredictable, it said.

Several production lines thus had to be dissolved, said the company which employs around 50,500 workers.

The company’s labor union proposed to support the laid-off workers 0.8 months of basic salary for each working year, and is awaiting approval from its parent company, Pou Chen Group.

Nguyen Thi Thuy, 39, one of the laid off workers who has worked at Pou Yuen for nearly 20 years, said if the plan is approved, she will receive about VND160 million ($6,700).

“I am going to apply for a seasonal job at a factory near my home in Long An Province (HCMC’s neighbor in the Mekong Delta).”

She plans to withdraw all her social insurance contributions next year.

Also due to drops in orders, Pou Yuen Vietnam will not renew contracts with about 3,000 employees who have worked for 1-3 years.

The company has not revealed support plans for this group.

Under current laws, when a contract expires and there is no new job, the employee will receive benefits from the unemployment insurance fund.

Pou Yuen Vietnam fired more than 2,800 workers in June 2020 also due to lack of orders. These workers were supported one-month salary for every year working at the company.

Global economic woes have dried up orders at many businesses in southern Vietnam. Those in HCMC reported more than 110,000 workers affected late last year, including 6,300 who were laid off. The city’s Labor Union forecast the prospect to be even dimmer this year as orders at certain sectors will drop by 40% in numbers and 20% in value.