Vietnam's garment-textiles sector sees 70,000 job cuts in Jan-May 2023

The total number of employees in the country affected by job cuts during the duration was nearly 510,000, of which 280,000 were laid off.

Vietnam Textile and Apparel Association (VITAS) president Vu Duc Giang attributed the mass lay-offs to a lack of orders. While many companies have large inventory that is not worthy of export, new orders are unavailable, he said.

Since the beginning of the third quarter of 2022 till now, a significant number of businesses in the industry have observed a precipitous decline in orders, Giang was quoted as saying by a Vietnamese media report.

As textile companies make every effort to reduce production costs to retain workforce, Giang is concerned that cheap labour will no longer be a competitive advantage for Vietnam's garment and textile producers.

During the first quarter this year, the majority of businesses saw a reduction in orders between 30 and 40 per cent as a result of high inflation in import markets, prompting consumers to begin saving money and reduce consumption of superfluous products, VITAS reported.

In the meantime, rising energy prices have driven up production costs, adding to the challenges already being faced by businesses.

Fibre2Fashion News Desk (DS)