Taiwan's Pou Chen Corp, one of the world's biggest suppliers of branded sports shoes, has reportedly laid out plans to lay off nearly 6,000 workers at its Ho Chi Minh City facility in Vietnam this year.
As per local sources familiar with the firm’s plans for the factory, the company is expected to carry out the layoffs in parts due to sluggish demand across the world.
Apparently, Pou Chen Corp’s facility in PouYuen, Vietnam, will terminate 3,000 positions this month and will not renew the employment contracts of another 3,000 workers later this year, according to anonymous sources.
With 50,500 employees, the PouYuen Vietnam factory, which provides goods to major corporations such as the renowned U.S. sports footwear and apparel brand, Nike and the German manufacturer Adidas, ranks among the biggest employers in Ho Chi Minh City.
Pou Chen stated that in the most recent round of cutbacks, the Vietnam manufacturer expected to eliminate no more than 3,000 employees, although the impact on business operations would be minimal.
It stated in a filing to the Taiwan exchange that the company would prudently adapt to the dramatic shifts in the business environment.
As per reports, the company’s decision to reduce positions represents a turnaround from the situation it was in 2021 when the coronavirus pandemic caused a labor shortage and production interruption in Vietnam.
The Southeast Asian nation is a center for manufacturing on a global scale, and its economy expanded at its quickest rate in decades in 2022. Nevertheless, experts have forewarned of setbacks, with falling global demand beginning to affect trade flows.
Vietnam's exports decreased 26% in January compared to the same month last year, while imports decreased by 24%. If businesses reduce their purchases of raw materials and production-related equipment, a fall in imports may be a sign of future industrial output contraction.
Source credit: https://www.straitstimes.com/business/taiwan-shoemaker-pou-chen-to-cut-6000-jobs-in-vietnam-sources