Vietnam: More efforts needed to stabilise year-end labour market

Le Thi Hien, a migrant worker in Ho Chi Minh City, lost her job after more than 15 years working at a local leather footwear company.

A month ago, she and nearly 1,200 workers received notice that the company has been facing a shortage of orders so it had to downsize production and cut staff. The decision was made only two months before the Tet (Lunar New Year) holiday.

While waiting for the procedures for unemployment allowance, Hien has taken several part-time jobs as a helper at a street vendor, a domestic worker and a babysitter for a family. The small amount from these jobs helps her make ends meet and stay in the city for a few weeks until she can receive her severance allowance.

“Young workers can find new jobs. I’m over 45 years old, so it’s difficult to get a job in another company during this difficult time,” she said.

“I hope the support is enough for me to start a small business in my hometown in An Giang province,” she said.

Hien is among thousands of workers in HCM City who have lost their jobs this December. Tens of thousands of others are facing the risk of losing their jobs or having their working hours cut, reported the Tin tuc (News) newspaper.

A quick survey of nearly 100 enterprises in the textile, footwear and electronic industries in HCM City, Binh Duong and Dong Nai provinces by the Vietnam Chamber of Commerce and Industry (VCCI) shows that 40.5% of enterprises have reduced their workforces and 54% said they would reduce working hours.

Most predict a gloomy future as up to 68% said orders would definitely decrease in the coming time, 23% couldn’t give any prediction and only 9% affirmed they would receive more orders than they currently do.

Footgearmex Footwear Co. Ltd, a Taiwan shoemaker in Binh Tan district, has announced layoffs of nearly 1,200 workers since early December.

Pham Thi Ut, the company’s representative, said that due to a slump in global demand, import partners have not signed new orders and the company could not maintain operations as before.

Other leather footwear companies are in the same situation. More than 1,400 workers at Vietnam Samho Company in Cu Chi district have been laid off while about 20,000 workers at PouYuem Vietnam Company Limited in Binh Tan district have been rotated to have 14 days off.

Textile and garment processing enterprises started well in the first months of this year when key export markets in the US and Europe reopened after the COVID-19 pandemic. However, the positive indicators did not last long as there were major conflicts in the world, leading to inflation spreading globally.

Viet Thang Jean Company Limited currently operates about 80% of the factory’s designed capacity. Increasing inventory leads to the risk that customers may cancel orders unexpectedly leaving the company with unsold products.

Pham Van Viet, General Director of the company, said the number of orders from the European market has decreased by 60% and those from the US market are down 30-40% since June.

Goods exported to these markets are being consumed slowly and more than 50% are still in stock and cannot be sold, he said.

Deputy Director of the city’s Department of Labour, Invalids and Social Affairs Nguyen Van Lam said that as of this December, more than 50,000 workers from over 150 enterprises have lost their jobs or had their incomes reduced.

Rising prices of raw materials and fuel in European countries and the US have led to the cutting of non-essential goods. That’s why many Vietnamese enterprises lack orders for exports.

Many businesses have searched for new markets to ensure the jobs of workers, the newspaper reported.

Viet Thang Jean Company Limited is trying to shift to the Canadian and Australian markets in order to maintain production and keep jobs for employees, but new markets have not yet been able to offset the decline from the US and European markets.

PouYuem Vietnam Company Limited is maintaining a payment of 180,000 VND for those who take turns having two weeks off.

Nguyen Chi Trung, Chairman of the Board of Directors of Gia Dinh Group Joint Stock Company, said orders have decreased by 30-40% compared to the same period in 2021 and will likely continue to have a strong downward trend in the coming months.

The company is trying to divide shifts so workers can still have some hours.

However, he admitted the firm would consider a plan to reduce staff in the near future if things do not improve.

The HCM City’s Confederation of Labour has directed trade unions at all levels to closely monitor the operation of enterprises to ensure the payment of salaries and allowances for employees who quit jobs.

It plans to spend 140 billion VND (5.9 million USD) giving gifts to workers in difficult circumstances, take care of migrant workers staying in the city to celebrate Tet, and support those who return to their hometowns.

Deputy Secretary of the HCM City Party Committee Nguyen Ho Hai has asked all levels and sectors to mobilise businesses to help employees who have worked less than 12 months and are ineligible for unemployment allowances and commit to not dismiss pregnant workers, workers raising children and people in difficult circumstances.

Businesses are required to pay social insurance, health insurance and Tet bonuses for employees./. VNS