HCMC workers forced to cut hours as factories struggle with material, order shortages

By Le Tuyet   July 30, 2022 | 08:00 pm PT
HCMC workers forced to cut hours as factories struggle with material, order shortages
People work at a textile factory in HCMC. Photo by VnExpress/Quynh Tran
After six months of post-Covid economic recovery, Ho Chi Minh City factories face material and order shortages, forcing them to downsize or reduce working hours, affecting staff's incomes.

For the past month, Nguyen Thi Thuy Dung, 32, a worker at Datalogic Vietnam, an Italian manufacturer of automated data collection equipment and software, has only been allowed to work 48 hours a week with no overtime. Because workers at the factory work six-hour shifts, at two shifts a day, it means Dung was only allowed to work four days a week.

"Without overtime pay, my income was cut by over 30 percent," Dung said. As a single mother, she had to adjust the family's budget. Nevertheless, she felt lucky to still be able to receive financial support from her company. After 11 years of working nonstop, she also felt it was the right time for her to wind down and spend more time taking care of her 13-year-old son.

Nguyen Thuy Van, 23, did not feel so comfortable. Working at a company that manufactures electrical products in the HCMC's hi-tech area, Van was caught in a downsizing after the company failed to make as many sales as it did in the past.

"The company has good benefits and I wanted to stay for the long run, so I was shocked to hear the news," she said. Workers who are part of the downsizing can only work eight hours a day with no overtime allowed. Some decided to quit and look for another job.

"Last month I only got VND6 million ($257.07), a VND3 million reduction from the previous month," she said, adding she's been looking for a new job. For now, she decided to stay until her contract expires and hopes for a settlement.

Dang Van Chung, general director of Datalogic Vietnam, said orders are coming in frequently post-Covid, but the firm lacks components to manufacture certain products.

"It is the same for most electric component manufacturers. We simply don't have enough component supplies to meet demands," he said, citing this as the reason why work hours have to be cut.

To make ends meet, the company agreed to buy components at higher prices to ensure a stable supply and complete orders. Components can be brought from those who stored them before the pandemic broke out, or even from the black market.

Even amid a lack of components, Chung said the company would try to ensure that every worker gets to work at least 48 hours a week. It will not fire workers and continue to maintain support policies as it waits for the market to recover.

Forced days off

The textile industry has it tough as well since the number of orders dwindles, forcing factories to let workers take alternate days off.

Tran Thi Tuyet Mai, deputy general secretary of the Vietnam Textile and Apparel Association (Vitas), said businesses used to have many orders but few workers in the beginning of this year.

In the second quarter, when the war in Ukraine broke out, along with oil price hikes and other factors, people's buying habits started to change on a global scale. Brands began to reduce their order numbers, meaning factories had to make workers take days off.

Nguyen Huu Tuan, HR director of the Thanh Cong textile and commerce company in Tan Phu District's Tan Binh industrial complex, said there would be an order shortage in September and October. A high number of workers would have to stay off work and the factory would shut down for about eight days, coinciding with the National Day holiday (September 1-4). After that, workers would take days off alternately. The change in working schedule is expected to cut workers' salary by 10-20 percent, he said.

Tuan said many businesses with weak finances would not be able to last until the end of the year, especially amid a lack of orders and high prices. Workers losing jobs would be inevitable, he added.

Despite all their financial difficulties, Thanh Cong still retains support polices, including pay raises for workers as it awaits market recovery.

Tran Viet Anh, deputy chairman of the HCMC Union of Business Association, said several fields are suffering from lower purchasing power among main markets like America and Europe.

"There are many leftover products in several factories. There are discounts, but still no one buys them," he said, adding that impacts of the pandemic, an ongoing war and inflation are being felt. Some businesses with strong financial backing will stockpile resources and wait for market conditions to improve. Still, there will be few new jobs for workers.

Viet Anh said reduced incomes may make workers seek new jobs, and once the market finally recovers, factories will once again face a worker shortage.

"This is a difficult talent-retaining challenge."

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