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Production decline leads to massive jobs cuts in Vietnam

  

A report by the Vietnam Textile and Apparel Association said 80 per cent of businesses in the industry laid off personnel in April and May due to a massive decline in textile and garment production. Another report by the Ministry of Industry and Trade says, textile production in the country grew just 2.8 per cent year-on-year in the first half of the year compared to 11.5 per cent in the same period last year. Garment production also fell by 4.7 per cent with the industry having difficulties sourcing raw materials and rapidly losing export orders to the pandemic.

This led to either delay or cancellation of export orders. In May, up to 50 per cent orders were canceled or postponed, and global prices fell 20 per cent as a result of the plunging demand. Most companies shifted their focus from clothes to face masks to meet the rising demand globally. Vietnam exported 557 million masks in the first six months, with the US, Germany, Singapore and South Korea being the main markets.

However, mask exports would not make up for the lack of garment orders as garment exports are likely to decline by 23 percent this year to $30 billion, views Le Tien Truong, CEO of the Vietnam National Textile and Garment Group.

 
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