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Nike, Adidas shoe supplier Pou Chen to slash 6,000 jobs in Vietnam -sources
Global Banking & Finance Review®
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HANOI (Reuters) -Taiwan’s Pou Chen Corp, the world’s largest maker of branded sports footwear, plans to cut around 6,000 jobs at its Ho Chi Minh City plant in Vietnam due to weak demand, two local officials familiar with the company’s plans said on Tuesday.
HANOI (Reuters) -Taiwan’s Pou Chen Corp, the world’s largest maker of branded sports footwear, plans to cut around 6,000 jobs at its Ho Chi Minh City plant in Vietnam 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 not extend labour contracts for another 3,000 workers later this year, the officials said, declining to be identified because they were not authorised to speak to media.
The Pouyen Vietnam factory supplies global companies such as Nike Inc. and Adidas AG and is one the biggest employers in Ho Chi Minh City, with 50,500 workers.
Pou Chen said the Vietnam factory planned to cut no more than 3,000 staff in the latest round of layoffs amid uncertainty over the macroeconomic outlook, and 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.
Pou Chen shares fell 1.2% in early afternoon trade in Taiwan in a broader market that was down just 0.1%.
Telephone calls to a factory labour union official were not answered.
The plan to cut jobs marks a reversal for the company that in 2021 faced a labour shortage and manufacturing disruption in Vietnam due to the coronavirus pandemic.
The Southeast 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% from a year earlier, while imports were down 24%. A decline in imports may indicate a future contraction in industrial production as firms cut purchases of materials and equipment for production.
(Reporting by Khanh Vu and Donny Kwok in Hong Kong Editing by Ed Davies and Sonali Paul)
Unemployment refers to the situation when individuals who are capable of working are unable to find a job despite actively seeking employment.
Economic growth is the increase in the production of goods and services in an economy over a period of time, typically measured by GDP.
A job cut refers to the reduction in the number of employees in a company, often due to financial challenges or restructuring.
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