Pou Chen Corp, a Taiwanese shoe manufacturer, will lay off an estimated 6,000 employees from its plant in Ho chi Minh City, Vietnam.
Pou Chen is the world’s largest branded footwear maker, providing supplies for global sports brands such as Nike and Adidas. According to Ho Chi Minh City’s labor department document, it is cutting jobs due to weak demand or “very few production orders in 2023,”
The Pouyuen Vietnam factory, Pou Chen’s production wing in the country, plans to lay off 3,000 workers this month. Meanwhile, another 3,000 workers will not have their labor contracts extended when they expire later this year. As one of the city’s biggest employers, this brings down the factory’s total headcount to roughly 47,500 from its current 50,500 workers.
"The company will prudently respond to the dynamic changes in the business environment," the company said in a filing to the Taiwan bourse.
Pouyuen Vietnam is expected to release a statement to their employees this coming February 25.
The manufacturing giant also experienced a drop in shares in early afternoon trade in Taiwan, falling 1.2%
Vietnam, a major exporter of clothing, apparel and furniture, has taken a blow from the rising cost-of-living in American and European markets, with the purchasing power of consumers worldwide weakening.
According to the Labour Ministry, more than 630,000 workers lost jobs in Vietnam in 2022 alone. In its 4th quarter last year, orders dropped 30 to 40 percent from US buyers, and 60 percent from Europe. The country’s exports also dropped 26% from the previous year, with imports down 24%.