Factory workers laid off, return to hometowns as order shortages persist

By Le Tuyet   August 30, 2022 | 01:01 am PT
Huynh Van Toan moved back to Ca Mau Province as his company's orders were halved to take up his old job of fishing after nearly 20 years.

The 40-year-old and his wife, Nguyen Thi Ngan, 38, worked for Hoang Thong Wood Co. Ltd., in Binh Duong Province's Di An Town.

But with business slowing down since May, the company has been operating at half capacity and does not require people working overtime.

Though it kept paying them their basic salary, Toan and his wife's combined incomes decreased by nearly VND7 million (over $298).

With their income barely enough for subsistence, the couple decided that Ngan would stay back while Toan would take their son back to Ca Mau.

Nguyen Thi Ngan during her shift at Hoang Thong Wood Co. Ltd. Photo by VnExpress/Le Tuyet

Nguyen Thi Ngan during her shift at Hoang Thong Wood Co. Ltd. Photo by VnExpress/Le Tuyet

He has put the four-year-old at a kindergarten near home for half the fees they paid in Di An.

Ngan continues to work at the factory and provide for her family despite earning only VND6 million a month.

If the company's orders continue to fall, she is likely to return to Ca Mau too.

"You don't have to pay rent in the countryside," he says. "You have vegetables to eat if you are hungry."

Toan is one of over 800 workers who quit when the company reduced working hours.

According to Duong Quang Hiep, the company's HR director, orders increased rapidly at the start of the year, and his company shelled out more than VND3 billion to travel to various provinces to recruit nearly 1,500 workers, even paying airfares for them if they lived far away.

Business partners were sending trucks to the factory in April to wait for finished goods as demand soared. But less than a month later orders abruptly fell.

"We spent a lot of time and money recruiting workers, but now we have to accept that they are leaving," Hiep said.

Production is not expected to revive until the middle of next year, and, meanwhile, workers are impatient and uncertain about the future.

According to Hiep, workers who quit their jobs mostly return to their hometowns because there are almost no jobs at wood products factories, and many businesses have closed down due to lack of orders.

Binh Duong has 29 industrial parks and 12 industrial clusters that employ around 1.2 million people.

Binh Duong and Ho Chi Minh City and neighboring Dong Nai Province have the highest concentration of factories in the southern region.

According to the Binh Duong Labor Federation, since the second quarter more than 330 manufacturing enterprises have faced difficulties forcing them to lay off workers and suspend contracts. More than 41,000 workers have been affected, it says.

Dang Tan Dat, deputy head of the federation’s legal policy department, says a number of industries that export to the E.U. and U.S., such as wood products, textiles, footwear, and electronics, are facing great challenges.

Many factories are seeing 30-50% decreases in orders, finished goods cannot be exported, revenues have slumped, and so on, he says.

When they lose their jobs, many workers choose to return home to save money because a basic salary of VND4-5 million is hardly enough for them to survive, he adds.

The Hung Loi 2 residential block has many vacant rooms after workers lost their jobs and returned to their hometown. Photo by VnExpress/Le Tuyet

The Hung Loi 2 residential block has many vacant rooms after workers lost their jobs and returned to their hometowns. Photo by VnExpress/Le Tuyet

In the last two months the Hung Loi 2 area in Binh Duong's Tan Uyen Town, which has over 1,300 rooms where workers live, has become less crowded compared to the beginning of this year as workers have been returning to their hometowns one by one.

Nguyen Van Hung, manager of the residential area, says there were more than 4,000 tenants during the busiest season, but now there are less than 2,000, and more than half the rooms are vacant.

In the past a worker seeking to rent a room had to make a reservation in advance.

The place is well designed, rents are reasonable, and it is close to industrial parks, making it a popular choice for workers.

However, many tenants have left for good and do not plan on coming back, Hung says.

Many owners of eateries and other shops near it have closed down and returned their rented premises to landlords as patronage plummeted with the departure of the workers.

"The situation is more difficult than it was during the Covid-19 pandemic," Hung says.

During the outbreak workers who lost their jobs were getting financial support and food, but now many people are unemployed and "have nothing to eat," he says.

As shortages dry up for factories, seasonal workers who do not have contracts are the first to be laid off.

This group of people, mostly from the Central Highlands regions, checked out more than a month ago.

Following them were those who planned to take 15-20 days off work with a basic salary and whose hometown is within 500 kilometers from Binh Duong.

Those who remain in the dormitories are people whose hometowns are too far away or entire families relocated to Binh Duong and has no place to return to.

Now without a job for a while, many people go to nearby ponds to catch snails or pick vegetables to put food on the table.

Seeing their plight, the owner of Hung Loi 2 has reportedly reduced the rent on rooms by VND300,000.

Hung says there are many vacant rooms not only at his dormitory but also many others.

His friend used to rent out 22 rooms, but only two are occupied now. Around 500 meters away from Hung Loi 2 is a dormitory with twice the number of rooms but only half are occupied.

Tran Thi Thanhs husband gets ready to go to work. Photo by VnExpress/Le Tuyet

Tran Thi Thanh's husband gets ready to go to work. Photo by VnExpress/Le Tuyet

Tran Thi Thanh, 36, of Thanh Hoa Province, says she has been looking in vain for work for several months now.

Her husband works at a factory that makes doors and glass walls, but it has stopped operation. He was paving the roads around the factory for the past month and got a basic salary of around VND5 million.

Meanwhile, his parents in Hai Phong City send fish and other food to them and his income is used to pay the rent and buy milk for their child.

"We had saved a small amount of money, but used it up during the Covid outbreak," Thanh says.

The Binh Duong Labor Confederation's vice president, Nguyen Hoang Bao Tran, says the province's trade union will soon coordinate with labor management agencies to find new job opportunities for migrant workers.

The union has called on businesses to quickly disburse support packages meant for workers, she adds.

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