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Pou Chen reportedly axing 6,000 jobs at Vietnam shoe factory on weak demand



Pou Chen was reported by Reuters, which cited local officials, to have executed a mass cull at its Vietnam factory, which is said to have 50,500 workers, making it one of the biggest employers in Ho Chi Minh City.

The Taiwanese footwear maker did not respond to comments when approached by Just Style.

But the shoemaker did file an official profit warning toward the end of last month in which it said it expects profits for the year to decrease year-on-year, mainly as a result of China’s Covid measures and weak consumer sentiment, which has led to a decline in operating income and affected performance.

For the month of January, Pou Chen booked sales of NTD24bn (US$843m), an 8.2% drop on a year-on-year basis.

Export softness appears to be a recurring theme in the wider Vietnam textile and footwear industry too.

According to preliminary statistics of the General Department of Customs, cited by official press publication Vinanet, exports of textiles and garments in January 2023 decreased by 22.4% compared to December 2022 and decreased by 37% compared to January 2022, reaching over US$2.25bn.

Exports to the US fell 21.5% month-on-month to January and fell 46.4% year-on-year to US$991.9m.

Exports to Japan rose 11% from December to US$248.9m but fell 34.4% year on year.

Exports to North Korea fell 5.3% from December and fell 22.2% year-on-year to January to $244.5m.

And exports to Germany fell 23.8% month on month and fell 34.6% compared to last January to $65.9m.

Back in November, Adidas launched an investigation into the Pou Chen factory in Myanmar, which was alleged to have sacked trade union members striking over pay and conditions.

The Pou Chen factory in Myanmar employs 7,800 workers. 29 workers were reportedly dismissed following the strike.

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