Economy Worsens, More Laid off

Corollary of economic recession at the breakneck speed in the world and Vietnam has lead to a gloomy labour market in 2009. According to the Ministry of Labour, Invalid and Social Affairs (MoLISA), it is forecast that 6,000-9,000 workers will lose jobs, 8,000 people will have their working hours cut.

Big cities - higher unemployment

The Department of Labour, Invalid and Social Affairs of Hanoi unveiled that 9,600 workers were sacked and another 1,000 people had no jobs for 3 months upwards. It is estimated the unemployment in enterprises will be 6,000-9,000 people, 8,000 workers will be short of work. These workers mainly come from companies specialising or processing exported goods such as textile and garment, leather and shoes, electronic assembling. As orders from importers fall sharply so some enterprises have to lay workers off alternately or narrow production, especially there are companies that go bankruptcy like Orion Hanel. Businesses in the industries of trade and tourism are also affected as demand plunges. To increase jobs, the Department has recommended the MoLISA to complement Hanoi with VND10-15 billion from the National Fund for job generation. As for the municipal People's Committee, the Department suggested that new fund should be put in the local budget to help workers find the jobs. As evaluated by the MoLISA, there were 30,000 unemployed workers nationwide in the last months of 2008 as a consequence of global economic recession. It is anticipated that the number will rise to 150,000 people.

Accordingly, lack of work and unemployment will roughly double, mainly caused by slow consumption of goods, especially enterprises specialising in exported products. Moreover, contractionary monetary policy, spiralling bank interest rates, higher input material costs, etc., leading to increasing unit prices have made big impacts on the efficiency of production, business, and consumption. Therefore, many enterprises are forced to cut down production, so that unemployment grows.

In the same miserable situation, Hanoi Knitting Join-stock Company also plans to cut sack 150 workers, half of its current staff. Xuan Hoa Mechanics Company has laid off 68 workers, 30 per cent of its employment. In 2008, there were 120 workers of Xuan Kien Auto Company losing jobs, more than 10 per cent of its labour and 60 per cent of employees are estimated to have their working hours cut in 2009.

Nguyen Quoc Hung, Director of Minh Khai One-member State-run Limited Company, said manufacturers were facing many difficulties. Price of input materials were escalating, especially raw coal having risen by three times; chemicals and materials were up by 30 - 40 per cent, oil and gas price and bank interest rate staying at high level. Meanwhile, price of exported articles made small increase, from 5 to 10 per cent. Mr Hung added, the more the Company produced the bigger the loss, even when it stopped operation because of paying interest. Consequently, the temporary solution is to cut down shifts and conduct alternative day-off among workers. Thuong Dinh Shoe Company has to reduce 20 - 30 per cent of export orders though it still maintains work for 1,600 employees but the working hours are fewer.