Garment giant in worker purge says more it produces, higher the losses

By Tat Dat   December 4, 2023 | 05:58 pm PT
Garment giant in worker purge says more it produces, higher the losses
Workers at a garment and textile factory in Tan Do Industrial Park in the southern province of Long An. Photo by VnExpress/Quynh Tran
Garmex Saigon Corporation, which recently laid off 1,945 workers, told the Ho Chi Minh Securities Exchange its losses have been increasing in direct proportion to output.

"We have reorganized our setup, cut our payroll, and temporarily ceased production to minimize losses," CEO Nguyen Minh Hang said.

After the layoffs this year, the firm had only 37 employees left at the end of the third quarter.

Garmex Saigon reduced costs but fewer orders from foreign businesses, growing inventories and higher rents have been causing increasing losses.

It had incurred losses for four consecutive quarters totaling VND66 billion (US$2.7 million) as of the third quarter of 2023.

For this year it has racked up losses of VND44 billion, six times that of same period last year, as revenues plummeted to VND8 billion from VND245 billion.

It plans to diversify to cut costs, investing in real estate in the immediate future, starting with a housing project.

According to the management, garment and textile inventories are high in many countries, and demand in Europe and the U.S. is not high, and so recovery could take until the second quarter of next year.

One of Vietnam’s leading apparel manufacturers with 70 production lines and five factories, Garmex Saigon had 4,000 workers in 2019 and profits of hundreds of billions of dong (VND1 billion = $41,000).

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