By Joe Fotalattee
According to Ho Chi Minh City Social Insurance statistics, businesses in the city reported a decrease of more than 34,000 people in the first two months of the year. More than 16,300 people applied for unemployment benefits during this time, according to data from the City Employment Service Center. More than 500,000 people are anticipated to need to find employment in 2023.
The number of people enrolled in social insurance will decline at the start of the year, according to Mr. Tran Dung Ha, Deputy Director of Ho Chi Minh City Social Insurance, because workers returning to their hometowns did not stay in the city. But this year, there are more factors influencing the state of the global economy. As a result, businesses face challenges and have to cut back on both labor and production. By the end of January, more than 1,300 businesses in the entire city had been dissolved, declared bankrupt, or ceased operations.
Nguyen Van Lam, the deputy director of the city’s department of labor, invalids, and social affairs, determined that the labor market in the city is still favorable. Orders have fallen, particularly in the processing sector, which includes the production of wood, footwear, and textiles. However, based on the survey, the associations predict that orders from June to July will gradually stabilize.
Phan Thi Thanh Xuan, vice president of the Vietnam Leather, Footwear and Handbag Association (Lefaso), told VnExpress that the industry as a whole employs 1.5 million people across more than 2,000 businesses. Orders in the sector are currently still down by 30%. Therefore, factories must undoubtedly cut back on labor if they want to lower costs and meet the demand for the product. When orders pick up again, this will result in a labor shortage for businesses.
Nearly 547,000 employees at 1,300 businesses had their working hours cut back or stopped as a result of reduced orders between September of last year and the end of January, according to data from the Vietnam General Confederation of Labor. Over 48,600 people lost their jobs, over 491,000 had their hours cut back or were halting their paid employment, and 7,000 people suspended their labor agreements among the affected workers. The majority of those impacted—75% of the total—work in FDI enterprises, primarily in the South’s textile, footwear, and wood processing sectors.