Is the dream of world factory 2.0 broken? Vietnam’s leading garment manufacturer “lays off 98% of its employees without orders” sells trucks to cash out | Finance | CTWANT

As the global political and economic situation changes, the world’s major economies such as Europe and the United States have shifted their attention from mainland China to Southeast Asia. Vietnam was once hailed as the “World Factory 2.0”, but data points out that Vietnam’s import and export orders declined by 2% in the second quarter of this year. number of people, causing 1.07 million people to lose their jobs, among which the textile, shoemaking, lumber and electronics industries were the most serious. Garmex Saigon, the leading garment manufacturer in Vietnam, even laid off 98% of its employees due to lack of orders in the third quarter, leaving only 37 people in the factory.

According to comprehensive foreign media reports, Garmex Saigon announced at the annual general meeting of shareholders on April 26 and the extraordinary general meeting of shareholders on September 27 that it would save costs to the greatest extent. According to data, Garmex Saigon has suffered losses for the fourth consecutive quarter. As of the third quarter, its revenue was approximately 8 billion VND (approximately NT$10.4 million), a 97% decrease from 245 billion VND (approximately NT$318 million) in the same period last year; The cumulative loss in the first three quarters was VND 44 billion (approximately NT$57.2 million), and the loss in the same period last year was VND 6.8 billion (approximately NT$8.84 million). The loss increased by 5470%. As of the end of the third quarter of this year, the accumulated loss was nearly VND 66 billion. (Approximately NT$83.56 million).

To this end, Garmex Saigon began large-scale layoffs in October this year. So far, it has laid off 1,945 employees, or about 98.1% of its employees, leaving only 37 employees to maintain basic operations. It plans to sell 9 trucks to cash in about VND3 billion (approximately NT$3.9 million). Garmex Saigon pointed out in a document submitted to the Ho Chi Minh City Stock Exchange on November 24 that the current operating environment is difficult and may suffer greater losses if it continues. Therefore, it has significantly reduced its workforce and temporarily suspended production. At the same time, it is optimizing existing resources and looking for partners. We can tide over the difficulties by transferring and selling idle assets, diversifying industries and making new investments.

Data from the Vietnam Textile and Apparel Association (VITAS) show that the export value of Vietnam’s textile industry has dropped by 21% annually, which is 5% lower than the same period in 2021 when the new crown epidemic is severe. The main reasons for the decline of Vietnam’s export industry are not only the anti-inflation interest rate hikes in Europe and the United States, which reduce private consumption willingness, the impact of war and rising raw material prices, but also the government’s increase in corporate tax to 15%, which may affect foreign investment willingness.