Adidas supplier in HCMC to lay off another 1,200 workers

By Le Tuyet August 23, 2023 | 03:36 am PT

Workers of Taiwanese footwear maker Pouyuen in HCMC's Binh Tan District leave the company after work in 2021. Photo by VnExpress/Quynh Tran

Taiwanese footwear maker Pouyuen, the largest employer in Ho Chi Minh City, will lay off more than 1,200 workers over lack of orders.

Huynh Le Nhu Trang, deputy head of the HCMC Department of Labor, Invalids and Social Affairs, on Wednesday said Pouyuen Vietnam, a contractor for major brands like Adidas, Nike and Reebook, will lay off 1,221 workers with indefinite contracts due to insufficient number of orders and partners.

The workers will be informed on Saturday of their severance pay, social insurance payment and tax procedures, Trang said.

For every year that a worker has worked for the company, they will receive a compensation equal to 0.8 of their monthly salary. A worker who has worked 20 years at the firm can receive VND192 million ($8,060) of severance pay.

All procedures to end employment contracts will be completed in September, and compensations will be handed out within the next seven days, Trang said.

This would be the fourth round of layoff at Pouyuen at a scale of thousands of people affected since the company started operation in HCMC in 1996.

In June 2020, over 2,800 workers were laid off, and this year, two rounds of layoffs saw 8,000 people being let go.

The company in Binh Tan District currently employs around 40,000 people, about a half of its peak periods.

In a report on business difficulties and economic prospect at the end of 2023 sent to Prime Minister Pham Minh Chinh, the Private Economic Development Research Committee anticipates that waves of layoffs will continue in the final months of the year. Around 30% of businesses would see their revenues reduced by half, with only 2.5% of businesses seeing revenue increases, it said.

Among 9,560 businesses surveyed in April, 82% said they would scale down, suspend or end business activities during the latter half of the year. Over 7,300 businesses said they would continue to operate but 71% of these, mostly in the construction and industrial sectors, said they would lay off workers.

Half of the businesses who planned to lay off workers operate in HCMC and its neighbor Binh Duong Province. Their biggest challenge was lack of orders.