Dismal! Order shortage! A well-known factory with 4,000 people laid off only 37 workers...

"Made in Vietnam" has hit the brakes in 2023. Weak global demand has also led to the shrinkage of exports on which it is extremely dependent. As a result, economic growth has also begun to slow down, causing a serious impact on the manufacturing industry...

On October 29, the Vietnam General Bureau of Statistics website announced key indicators of economic performance in the first 10 months. In the first 10 months, the total import and export volume of goods was US7.95 billion, a year-on-year decrease of 9.6%. Among them, the export value was US1.28 billion, a year-on-year decrease of 7.1%; the import value was US6.67 billion, a year-on-year decrease of 12.3%. There was a rebound in October, with exports reaching US.31 billion, a month-on-month increase of 5.3% and a year-on-year increase of 5.9%.

Order shortage! A well-known company in Vietnam with 4,000 employees laid off only 37 workers.

Vietnam relies on textile exports as an important economic pillar. However, due to the strong interest rate hikes by major economies such as the United States and Europe to suppress inflation, consumption power has been greatly reduced, which has also affected the order performance of Vietnam's garment industry. Facing dwindling orders, Vietnam's garment giant Garmex Saigon continues to lay off employees aggressively, with nearly 2,000 employees laid off this year.

Vietnamese media "VnExpress" reported that Garmex Saigon announced that it had laid off a total of 1,945 employees this year, with 37 employees remaining as of the third quarter, continuing last year's decision to cut more than 1,800 employees. Garmex Saigon admitted that the recent order reception situation has been very bad, and this year In the second quarter, it had no orders and only had a small amount of revenue from other service businesses, falling into four consecutive quarters of losses.

It is reported that Garmex Saigon is the leading garment OEM manufacturer in Vietnam. It has five factories, all with 70 production lines. In 2019, it had 4,000 employees and annual profits reached hundreds of billions of VND (100 billion VND). = US.07 million). The company has been selected as one of the 50 best-performing listed companies in Vietnam by Forbes Vietnam magazine.

In the first nine months of this year, Garmex Saigon's cumulative revenue was only 8 billion VND, a sharp decrease of 96.7% from 245 billion VND in the same period last year, and its losses since the beginning of the year have reached 66 billion VND.

Garmex Saigon stated that due to deep losses, it initiated cost-saving measures, improved the efficiency of current asset utilization, and considered selling non-essential real estate. It also re-examined manpower needs, hoping to reduce operating pressure by reducing personnel and other costs.

Under the triple attack of high inflation, high interest rates, and a sluggish global economy, Vietnam's garment industry is facing a particularly cold winter. Official statistics from Vietnam show that in the first five months of this year, the number of unemployed people in the local garment industry reached 70,000, and another 66,600 working hours were reduced.

Vietnam: Further layoffs are expected at the end of the year

According to Vietnamese media reports: The director of the Ho Chi Minh City Planning and Investment Bureau said that the employment index fell by 3.2% year-on-year in October, and corporate layoffs are expected to increase in the fourth quarter.

Previously, a survey conducted by the Private Economic Development Research Committee (the fourth branch of the Prime Minister's Administrative Procedure Reform Advisory Committee) at the end of April also predicted that the wave of layoffs will continue to be extended until the end of the year due to difficulties.

Specifically, 82% of the nearly 9,560 companies that participated in the survey said they would reduce their scale, suspend or cease operations in the second half of the year. More than 7,300 companies said they were still operating, but 71% of them planned to cut the most jobs in two sectors: construction and industry. Most of the companies cutting spending are non-state-owned enterprises, half of which operate in Ho Chi Minh City and Binh Duong. These companies said that the biggest challenge they currently face is orders.

Similarly, the Ministry of Labor, Invalids and Social Affairs also stated that if economic difficulties do not improve, the wave of large-scale layoffs may continue until the end of the year. This situation began in the middle of last year, when consumer demand in major markets such as the United States, Europe, and Japan decreased, resulting in a series of domestic companies losing orders at the end of the year, facing difficulties in raw materials, and rising costs.

Recently, at an international conference in Vietnam, many companies in the textile, footwear and wooden furniture industries expressed concerns about a serious decline in exports.

In addition, on October 26, the Ministry of Commerce of the People’s Republic of my country held a regular press conference and responded to the question: What is the situation of China’s foreign trade? Is China’s foreign trade not out of the woods yet? It said that China’s foreign trade operations are generally stable, especially the steady progress in recent months. The situation is further revealed.

At the same time, we noticed that the 134th Canton Fair was very popular and had active transactions. The number and quality of overseas buyers attending the fair had greatly improved. Merchants from various countries were very interested in and favored Chinese goods and Chinese manufacturing.

These positive changes are inseparable from the persistence and innovation of the vast number of foreign trade entities and the effective implementation of stabilizing foreign trade policies. They also demonstrate the resilience and vitality of China's foreign trade. With the continuous accumulation of positive factors, we are confident that we will continue to consolidate the good operating situation in the fourth quarter and achieve the goal of stabilizing and improving the quality of foreign trade throughout the year.