Nike, Adidas shoe supplier Pou Chen to slash 6,000 jobs in Vietnam -sources (updated)
21/02/2023 06:05
(Adds comment from Pou Chen, latest stock price)
HANOI, Feb 21 (Reuters) - Taiwan's Pou Chen Corp
9904.TW , the world's largest maker of branded sports footwear,
plans to cut around 6,000 jobs at its Ho Chi Minh City plant in
Vietnam due to weak demand, two local officials familiar with
the company's plans said on Tuesday.
The firm's Pouyuen Vietnam factory will cut 3,000 jobs this
month and not extend labour contracts for another 3,000 workers
later this year, the officials said, declining to be identified
because they were not authorised to speak to media.
The Pouyen Vietnam factory supplies global companies such as
Nike Inc. NKE.N and Adidas AG ADSGn.DE and is one the
biggest employers in Ho Chi Minh City, with 50,500 workers.
Pou Chen said the Vietnam factory planned to cut no more
than 3,000 staff in the latest round of layoffs amid uncertainty
over the macroeconomic outlook, and the impact on operations
would be limited.
"The company will prudently respond to the dynamic changes
in the business environment," Pou Chen said in a filing to the
Taiwan bourse.
Pou Chen shares fell 1.2% in early afternoon trade in Taiwan
in a broader market .TWII that was down just 0.1%.
Telephone calls to a factory labour union official were not
answered.
The plan to cut jobs marks a reversal for the company that
in 2021 faced a labour shortage and manufacturing disruption in
Vietnam due to the coronavirus pandemic.
The Southeast Asian country is a global hub for
manufacturing, and its economy in 2022 grew at the fastest pace
in decades, but economists have warned of headwinds, with
weakening global demand starting to impact trade shipments.
Vietnam's exports in January fell 26% from a year earlier,
while imports were down 24%. A decline in imports may indicate a
future contraction in industrial production as firms cut
purchases of materials and equipment for production.
(Reporting by Khanh Vu and Donny Kwok in Hong Kong
Editing by Ed Davies and Sonali Paul)
((khanh.vu@thomsonreuters.com; +84 24 38259623; Reuters
Messaging: khanh.vu.thomsonreuters.com@reuters.net))