Nike, Adidas shoe supplier Pou Chen to slash 6,000 jobs in Vietnam: Sources

Vietnam is a global hub for manufacturing but economists have warned of headwinds, with weakening global demand. PHOTO: AFP

HANOI – Taiwan’s Pou Chen Corp, the world’s largest manufacturer of branded sports footwear, plans to cut around 6,000 jobs at its Ho Chi Minh City factory in Vietnam in several phases this year due to weak demand, two local officials familiar with the company’s plans said on Tuesday.

The firm’s PouYuen Vietnam factory will cut 3,000 jobs this month and will not extend the labour contracts for 3,000 other workers later this year, the officials said, who declined to be identified because they were not authorised to speak to media.

The PouYuen Vietnam factory, which supplies goods to global companies such as Nike and Adidas, is one of the largest employers in Ho Chi Minh City, with 50,500 workers.

Pou Chen said the Vietnam factory planned to cut no more than 3,000 workers in the latest round of layoffs amid uncertainty over the macroeconomic outlook, and that the impact on operations would be limited.

“The company will prudently respond to the dynamic changes in the business environment,” Pou Chen said in a filing to the Taiwan bourse.

The plan to cut jobs marks a reversal for the company that in 2021 faced labour shortage and manufacturing disruption in Vietnam due to the coronavirus pandemic.

The South-east Asian country is a global hub for manufacturing and its economy in 2022 grew at the fastest pace in decades, but economists have warned of headwinds, with weakening global demand starting to impact trade shipments.

Vietnam’s exports in January fell 26 per cent from a year earlier, while imports were down 24 per cent. A decline in imports may indicate a future contraction in industrial production as firms cut purchases of materials and equipment for production. REUTERS

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