Taiwanese shoemaker PouYuen Vietnam Co. Ltd., the largest employer in Ho Chi Minh City, has said it will lay off about 3,000 workers this week, blaming a lack of orders.

The company, which employs 50,500 workers to manufacture footwear on a contractual basis for major global brands such as Nike, Adidas, and Reebok, plans to formally announce the lay-off decision on February 25.

The firm already asked laid-off employees to stay at home after a shoe brand canceled orders last year.

It tried to make arrangements but could not guarantee jobs for the large number of affected workers.

The company’s labor union proposed supporting the laid-off workers with one month of basic salary for each working year, and is awaiting approval from its Taiwan-based parent company, Pou Chen Group.

In addition, PouYuen Vietnam will not renew its employment contracts with another 3,000 workers, who have worked for one to three years, also due to drops in orders.

The company has not revealed support plans for this group.

According to Vietnamese laws, when a contract expires and is not extended, the employee will receive benefits from the unemployment insurance fund.

PouYuen Vietnam gave nearly 20,000 workers a day off alternately every week at the end of last year due to a shortage of orders.

It fired approximately 3,000 workers in June 2020 due to a decrease in orders on account of the COVID-19 pandemic.

These workers were supported with one month of salary for every year working at the company.

Global economic woes have dried up orders at many businesses in southern Vietnam. 

Those in Ho Chi Minh City reported more than 110,000 workers affected late last year, including 6,300 who were laid off. 

The city’s Labor Union forecast the prospect to be even dimmer this year as orders in certain sectors will drop 40 percent in numbers and 20 percent in value.

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