Last week, PouYuen Vietnam announced that it would lay off some 3,000 workers at its plants in Binh Tan District of Saigon when their employment contracts end in August, reports Tuoi Tre. The company, a subsidiary of Taiwan's Pou Chen Corporation, has been producing sports footwear in Vietnam since 1996, the newspaper adds.

With 70,000 employees, PouYuen is Saigon’s biggest employer, so the job cuts will affect many households in the near future, especially at a time when many other firms are also on shaky ground financially.

According to Cu Phat Nghiep, the company union’s president, the initial plan included as many as 6,000 layoffs, but the number was eventually revised to 3,000. PouYuen attributes the redundancy to diminishing orders from Europe and the US, which are among the economic regions most heavily-impacted by the novel coronavirus.

Since February, when COVID-19 reached Vietnam, the company has adjusted its production volumes and imposed alternating schedules for its staff to accommodate plummeting demand, though with outbreaks taking place frequently well into June in the US and Europe, client demand did not pick up sufficiently, reports Phap Luat.

Tuoi Tre elucidates that workers who are let go will receive financial support in accordance to their time in the company. They are entitled to one month of salary for every year at PouYuen.

This is not the first time COVID-19 has negatively affected operations at PouYuen. In April, Saigon authorities shut down the company for two days for failing to meet pandemic safety requirements, though it was allowed to reopen after making improvements.

Industrial parks, where thousands of workers carry out daily tasks in close quarters, posed high risks of coronavirus spread during the months when community transmission was present in Vietnam. From April 17 to 21, Saigon started testing all workers in its industrial parks. As of April 22, when the testing ceased, 6,281 samples from these facilities were processed — all turned out negative.

[Photo via Tien Phong]