Millions face job loss as employment market feels COVID-19 effects

07-Apr-2020 Intellasia | The Gioi Vietnam | 6:02 AM Print This Post

Craft associations believe that a host of enterprises are poised to face insurmountable difficulties, with millions of workers facing the prospect of being laid off as the economic impact of the novel coronavirus (COVID-19) begins to be felt.

The Ministry of Industry and Trade reports that firms operating in the garment, leather and footwear, and woodwork processing sectors have been hit by a double impact from the ongoing COVID-19, after many of their buyers chose to delay delivery of signed orders in the months ahead. Moreover, the vast majority of buyers are currently declining to enter into negotiations for new orders.

Local electronic businesses that made approximately $5 billion from exports during the year’s first quarter fear they will be left with no new orders from importers unless the COVID-19 is eradicated in the near future.

The economic impact of the virus is even affecting giants such as Samsung Vietnam, one of the country’s largest hard currency earners, which are poised to scale down production. Indeed, the firm’s projected export value for the year will also be slashed by roughly $6 billion to $45.5 billion in comparison to last year’s $51.3 billion.

This negative outlook is also being mirrored in other sectors, with the Vietnam Timber and Forestry Product Association stating that all five key importers of Vietnamese woodwork products, including the United States, the European Union, Japan, China and the Republic of Korea have chosen to either delay or cancel orders that had been placed with their Vietnamese counterparts.

The Vietnam Leather, Footwear and Handbag Association fears that a long continuation of the ongoing COVID-19 epidemic will lead to massive layoffs.

In a report recently submitted to the National Assembly Committee on Social Affairs, the association outlines their prediction that between 60 percent and 80 percent of its firms will move to temporarily suspend operations by the middle of April, therefore affecting 800,000 workers. This massive number of layoffs could increase to 1.2 million by the end of April if all businesses cease operations.

Moreover, some 70 percent of orders signed for April and May are to be canceled, while there are no signs of negotiations getting underway for new orders for June and the subsequent months, according to the report.

These grim predictions come after the government recently approved a rescue package for local firms and an additional financial aid package worth $2.6 billion aimed at supporting those vulnerable to the COVID-19 epidemic.

With garment businesses under increasing pressure, Le Tien Truong, director general of the Vietnam Garment and Textile Group, proposes that support policies for businesses should be implemented immediately before the situation worsens.

Without an adjustment in policy, it is highly likely that a number of enterprises will lose their liquidity by the end of April, he warns.

http://tgvn.com.vn/millions-face-job-losses-as-employment-market-feels-covid-19-effects-112873.html

 


Category: Economy, Vietnam

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