In order to cope with the difficulties caused by Covid-19 epidemic, businesses were forced to choose their own solutions to survive. According to recent research, there were up to 65.5% of enterprises cutting down their regular operating expenses, 35.3% of enterprises cutting labor, 34.0% have to cut their wage and 34.5%. enterprises must give their employees unpaid leave; 44.7% of businesses cut down the scale of production; 34.7% of businesses choose to suspend production and business activities to wait through difficult times and 15.1% of enterprises change their production and business forms to suit to the new context.
The epidemic caused a slump in demand and the closure of major markets, leading to a 25% decline in the number of textiles, garment and footwear export orders in April and more than 30% in May. Many businesses in textiles, footwear have been cutting thousands of employees. In addition to the market problem, the shortage of raw materials is also the reason for many textile enterprises to narrow production and reduce labor.
Not only the textile and footwear industry, many businesses in other production and service groups are also moving to reduce wages and cut personnel. Typically, a company specializing in designing game products in Ho Chi Minh City is also struggling when the sales plummeted. According to the company's representative, in near future, besides reducing 50% of the staff, the remaining number of employees will also have a reduction of 20-25% of their salary.
On June 16, CEO and co-founder of Grab, sent a kind letter to his employees announcing about a reduction of about 360 "Grabbers", equivalent to nearly 5% of the staff of this application. This is the latest change since the end of April 2020, the Grab app started offering employees voluntary unpaid leave or reduced working hours to avoid having to lay off employees.
The General Statistics Office's report showed that FDI enterprises were the main subjects with a shortage of input materials, with 39.6%. If only importing enterprises mentioned, the above rate increased to 56.9%, in which enterprises in the garment and footwear industry are the most affected, with a shortage of 70.3% and 71% respectively.
The reduction of personnel is undesirable for any business but in necessary circumstances it must happen as Faro Vietnam has shared before.
When reducing personnel, businesses will face to many legal issues such as the process of properly terminating labor contracts, compensation liability when terminating labor contracts with employees due to Covid-19 ...
Please contact Faro Vietnam for advice and support on reducing personnel issues
Tel: + 84 24 3974 3091 (Hanoi Office) / + 84 28 3821 4654 (HCMC office)