Adidas, Reebook supplier to sack 6,000 workers
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Footwear maker Pou Yuen Vietnam, the largest employer in HCMC, will lay off nearly 6,000 workers, or 10% of its workforce, amid a decline in orders.
This is the biggest layoff of the Taiwanese company, a supplier to Adidas and Reebok, since its operation in HCMC in 1996.
At a recent meeting with city authorities, the company’s management said with orders plummeting their factories are forced to reduce staff.
Since the end of last year they have been adjusting production plans, furloughing workers and rearranging them between factories.
They expect to lay off 5,744 workers in two batches on June 24 and July 8. The discharged staff will be paid compensation at the rate of 80% of their last drawn salary for every year they worked.
During the notice period, workers not coming to work will still be paid full wages.
Pregnant workers, on maternity leave, having kids under 12 years, from poor households, disabled, and facing other disadvantages will not be laid off.
Pou Yuen had laid off 2,358 workers in February and over 2,800 in June 2020 just after Covid broke out.
Layoffs are also happening in many other companies due to the bleak economic situation.
A survey by the city Department of Labors, Invalids, and Social Affairs of 4,000 firms in Q1 found 31% had reduced their workforce and only 19% increased it.
Layoffs often occur in footwear, garments, construction, and food processing sectors.
Questions & Answers
Q.What is the primary reason for Pou Yuen Vietnam's decision to lay off workers?
What is the primary reason for Pou Yuen Vietnam's decision to lay off workers?
The company is reducing its workforce due to a decline in orders. Its management stated that plummeting orders have forced their factories to cut staff and adjust production plans.
Q.How will the affected employees be compensated for the layoffs?
How will the affected employees be compensated for the layoffs?
Discharged staff will receive compensation equivalent to 80% of their last drawn salary for each year they worked. Also, workers will be paid full wages during their notice period, even if they are not working.
Q.Which groups of workers are exempt from the upcoming layoffs at Pou Yuen Vietnam?
Which groups of workers are exempt from the upcoming layoffs at Pou Yuen Vietnam?
Pregnant workers, those on maternity leave, employees with children under 12 years, individuals from poor households, disabled workers, and those facing other disadvantages will not be laid off.
Q.Has Pou Yuen Vietnam implemented significant layoffs previously, or is this an isolated event?
Has Pou Yuen Vietnam implemented significant layoffs previously, or is this an isolated event?
This is the biggest layoff since the company began operating in HCMC in 1996. However, Pou Yuen also laid off over 2,300 workers in February and more than 2,800 in June 2020.
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