Temporary workers are being laid off abruptly and in droves by manufacturing establishments in Vietnam as orders decline on the back of global inflation weakening consumption in major export markets.
“You are laid off, no need to come in tonight” was the text message that Nguyen Thi Ai Linh in Thu Duc City received early last month from her manager, just a few hours before she was to begin her night shift.
The 36-year-old first thought that there was some mistake, but after she was removed from a work chat group, she realized that her job with precision manufacturer Nidec Vietnam was over.
As a temporary worker, Linh received no compensation for the layoff and was also not eligible for unemployment benefits.
She has applied to several other companies in the last few weeks, but has not got a call yet.
Her four-member family now lives on VND13 million ($523) a month, the income of her husband who works as a driver.
Linh is among over 2,400 temporary workers laid off by Nidec Vietnam in recent months after the company saw orders plunge by as much as 30%.
The number of temporary workers fell from 4,200 in early July to 1,800 in October, while that of official workers increased by just 100 to 2,800, said the company’s labor union chairman Luu Kim Hong.
Earlier this year, when there were orders aplenty and there was a shortage of workers, many people preferred temporary work as it was easy to find a job and they could quit anytime without having to give not of 30-45 days, he said.
But now, as orders decline, factories are letting temporary workers go first as there are no legal commitments, he added.
“Factories are benefiting from these layoffs as it costs less to fire a temporary worker than an official one, but temporary workers face challenges as they do not receive any compensation or support.”
Nguyen Thi Bich Van, 38, has been looking for work in Ho Chi Minh City since last month when she was laid off as a temp by a garment factory.
Earlier this month she approached recruitment company Lam Thinh Phat, but was told that it would be difficult to find a job.
Nguyen Thi Bich Van looks for a job on a bulletin board at Tan Thuan Export Processing Zone in Ho Chi Minh City. Photo by VnExpress/An Phuong
Nguyen Thanh Cao, a recruiter at the firm, said that demand for workers has been plunging at factories.
In the same period last year, 20 companies were seeking 1,000 workers from Lam Thinh Phat, but this had gone down to two factories looking for 150 workers.
One electrical cable manufacturer recently cut the number of temporary workers from 500 to 70, Cao said.
He added that people like Van were less likely to find a job now because factories have raised their recruitment standards.
Last year they only required a healthy person of working age, but now they were prioritizing those in the 18-35 age group who have graduated from secondary school at least.
At present, even if a worker manages to land a job, he or she will not have the same income as before because there was less work and almost no overtime.
Cao said the current circumstance shows the importance of having an official long-term contract with a company as it gives employees one- or two-month pay and unemployment benefits if they were laid off, Cao said.
Pham Quang Anh, CEO of garment firm Dony in HCMC’s Tan Binh District, said that workers began to prefer temporary jobs last year when Covid-19 was spreading.
This was challenging for companies, but they had no choice but to accept temporary workers and pay them every day, he said.
Now that orders are falling, these workers are the first to go, he said. Employers would normally try to keep workers for a long time as their experience and commitment would be the main driving force for the factory’s recovery when orders resume, Anh said.
Nguyen Duc Loc, head of the Social Life Research Institute, said that one reason people choose temporary work is that they do not have to pay social insurance and that sum adds directly to their income, which helps as they struggle to make ends meet.
He said official policies have to be changed to to limit companies from using a large number of temporary workers so that the latter are better protected.
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