Taiwan-based Pou Chen Group, the world’s largest branded sneaker maker, plans to cut about 6,000 jobs at its factory in Ho Chi Minh City, Vietnam, due to weak demand, two local officials familiar with the company’s plans said Tuesday.
The Pouyuen Vietnam plant will cut 3,000 jobs this month and will not renew the contracts of another 3,000 workers later this year, officials said, who declined to be named because they are not authorized to speak to media.
Pouyen Vietnam factory supplying global companies such as Nike Inc. and Adidas AG, is one of Ho Chi Minh’s largest employers, employing 50,500 people.
Due to uncertain macroeconomic outlook, the Vietnamese factory plans to cut no more than 3,000 jobs in the latest round of layoffs with limited impact on production, Pou Chen said.
“The company will intelligently respond to dynamic changes in the business environment,” Baocheng said in a statement to the Taiwan Stock Exchange.
Shares of Pou Chen fell 1.2% in Taiwan afternoon trading, compared with a 0.1% drop in the market as a whole.
The job cuts mark a turnaround for the company, which will face labor shortages and production disruptions in Vietnam in 2021 due to the coronavirus pandemic.
The Southeast Asian nation, a global manufacturing hub, is set to grow at its fastest pace in decades in 2022, but economists warn that weak global demand is beginning to weigh on trade supplies.
Vietnam’s January exports fell 26% year on year, while imports fell 24%. The fall in imports could signal a future contraction in industrial production as companies reduce purchases of manufacturing materials and equipment. (Reporting by Han Wu and Donnie Kwok in Hong Kong, editing by Ed Davis and Sonali Paul)
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