Roughly one year ago, when the Covid pandemic hard hit southern factories, Trinh and many other garment workers in the southern province of Binh Duong covered a distance of nearly 2,000 km to return to their hometown, the central province of Thanh Hoa.
After Tet (Lunar New Year holiday) in early 2022, she intended to seek a job in the hometown to have conditions to take care of her little daughter. But her garment factory phoned her, telling her back to work because it was receiving more orders and facing a labor shortage.
Many such a call were made as businesses started to resume full operation after the pandemic was put under control. Employers were afraid of encountering severe shortages of labor because a large number of workers had returned to their native provinces, and been reluctant to back to work.
Nong Van Dung, deputy director of the Dong Nai Department of Labor, Invalids and Social Affairs, said the department’s officers went to the Central Highlands region and the Mekong Delta to persuade workers to come back to work in the southern province. At that time, factories in Dong Nai needed some 60,000 workers.
Phi Ngoc Trinh, general director of Ho Guom Garment Company, said garment firms, which created 3 million jobs, received increasing orders, and they could choose the most suitable ones.
Garment 10 Company even prepared materials for production slated for the next six months to serve big markets.
However, some months later, everything suddenly changed.
Garment 10 Company’s general director Than Duc Viet said 10-15% of foreign clients told his company to delay production, explaining that they had big inventories till Christmas, while the firm had already prepared materials for production.
“Returning to this land (Binh Duong), I have never thought that we would be underemployed in the year-end like this,” garment worker Trinh said in late November, sitting in a boarding house in the province’s Di An City.
After six months of working overtime, she and over 100 colleagues in the garment factory are now working only five days a week.
Receiving fewer orders, a plethora of garment factories have had to scale down production. The number of orders, mainly from Japan’s Uniqlo and the U.S.’s Nike and Adidas, a garment firm in the northern province of Hai Duong received in October decreased 30% against October 2021, so it told workers to stop working overtime.
In September, the firm planned to open a new factory, but now it has stopped the plan on hiring more workers, and tried to maintain the current workforce of 17,000 after laying off some 4,000 people.
Truong Van Cam, president of the Vietnam Textile and Apparel Association, forecasted the order shortage will last till mid-2023 at the earliest.
Like garment makers, footwear and construction materials firms faced the same gloomy situation.
“We, footwear producers, have never seen such a strange market over the past 40 years. Orders have dropped en masse in a short period of time,” said a Vietnam Leather, Footwear and Handbag Association official.
The official said that in June factories still received orders and hired more workers, but only one month later, orders started to decrease gradually. Most factories encountered order shortages of 50-70%, even some got no orders, he recalled.
Dinh Hong Ky, vice president of the Vietnam Association for Building Materials, told VnExpress that construction material firms have recently laid off more workers than in early 2021 when the pandemic situation was serious.
In April 2021, the firms also reduced their workforce and working hours, but mainly to follow pandemic prevention rules, while market demands remained stable, he explained.
Ky’s firm, Secoin, whose nine factories produce bricks and tiles for export to 60 countries, has had to cut jobs. One of the factories has recently reduced its workforce by 40%.
“In October, the first time in our company’s history, clients in Japan told us to stop production for new orders. They will only receive products for orders placed earlier,” he said, noting that even in the 2008-2009 Asian financial crisis, his company’s export to Japan did not decrease.
“No one in the building materials industry, neither Vietnamese factories nor foreign customers, can confidently predict when the difficulties will end,” Ky said.
According to Ky, unfavorable conditions for production include the uncertainties of geopolitical tensions, China’s unpredictability with anti-pandemic policies and high inflation, and Vietnam’s sluggish real estate market and tightened credit growth.
Massive layoffs
According to statistics from the Vietnam General Confederation of Labor, 472,000 workers have recently been fired or underemployed, with 41,500 people having their labor contracts terminated. Most of them worked in such labor-intensive industries as garment and textile, footwear, wood processing, seafood, electronic component and mechanics.
Shrunken working hours and salaries have happened at not only blue-collar workers but also white-collar ones.
In late November, a leading construction firm with a workforce of more than 5,000 asked office clerks to work only 40 hours a week, from Monday to Friday, and lowered salary-based allowances of managerial post holders.
Hoai Anh, a communication staff of an advertisement company in Hanoi, was shocked last weekend when she was informed that her income would decrease by 30% starting in December due to the company’s receiving fewer customers. Smaller salary means smaller social insurance premium.