1,200 workers lose jobs as Taiwan footwear firm runs out of orders
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A Taiwanese shoemaker in HCMC’s Binh Tan District has laid off 1,185 workers and blamed it on a drying up of orders.
In an announcement, Monday Ty Hung Co. Ltd, said its customers face financial issues and have not placed new orders.
Despite trying everything it could, it is unable to maintain production as planned and has no choice but to terminate labor contracts with 1,185 people on Dec. 1, the statement said.
It will pay a severance allowance to employees who have worked since 2008 and two months’ salary to all employees whose social insurance premiums are now cut due to losing their job.
It will also pay one month’s salary as a bonus to those who worked for the entire year until being laid off and make pro rata payments to others.
The Taiwanese firm has 1,800 employees and makes shoes for export to Europe.
According to the Ho Chi Minh City Labor Confederation, textile, footwear, and electronic factories have lost orders due to difficulties in finding raw materials and falling demand.
To cope, many factories in the city have cut workers’ hours or furloughed or laid them off, it added.
Questions & Answers
Q.What is the primary reason given for the job losses at the footwear firm?
What is the primary reason given for the job losses at the footwear firm?
The Taiwanese shoemaker stated that its customers are experiencing financial difficulties and have stopped placing new orders, leading to a significant reduction in work. This drying up of demand made it impossible to maintain production levels as previously planned.
Q.What compensation will be offered to the affected employees?
What compensation will be offered to the affected employees?
Employees who have worked since 2008 will receive a severance allowance. All laid-off employees will get two months' salary due to their social insurance premiums being cut, and those who worked the full year will receive a one-month salary bonus.
Q.How many employees did the Taiwanese shoemaker have before these layoffs?
How many employees did the Taiwanese shoemaker have before these layoffs?
Before the current layoffs, the Taiwanese firm employed a total of 1,800 workers. The termination of contracts for 1,185 people means a substantial reduction in its workforce.
Q.Are other industries in Ho Chi Minh City also experiencing similar difficulties?
Are other industries in Ho Chi Minh City also experiencing similar difficulties?
Yes, the Ho Chi Minh City Labor Confederation reported that textile, footwear, and electronic factories are also facing challenges. They are losing orders due to difficulties in sourcing raw materials and a decrease in overall demand.
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