The world’s largest maker of branded sports footwear i.e Taiwan’s Pou Chen Corp will slash around 6,000 jobs at its Ho Chi Minh City plant in Vietnam due to weak demand.
Its plan
This factory will cut 3,000 jobs this month and cut labor contracts for another 3,000 workers later this year.
It is renowned for providing factory supplies to global companies such as Nike and Adidas and is also one the biggest employers in Ho Chi Minh City, with 50,500 workers.
Pou Chen said the Vietnam factory planned to cut no more than 3,000 staff in the latest round of layoffs amid uncertainty over the macroeconomic outlook.
They further assured that impact on operations would be limited.
Unusual scenario
“The company will prudently respond to the dynamic changes in the business environment,” Pou Chen said in a filing to the Taiwan bourse.
The job layoffs are unusual for the company that in 2021 faced a labour shortage and manufacturing disruption in Vietnam due to the coronavirus pandemic.
Vietnam is recognised as a global hub for manufacturing, and its economy in 2022 grew at the fastest pace in decades.
Economic hardships
However economists caution against headwinds, with weakening global demand starting to impact trade shipments.
The nation’s exports in January fell 26% from a year earlier, while imports were down 24%.
This import decline can be seen as a future contraction in industrial production as firms cut purchases of materials and equipment for production.
