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Survive! Layoffs or job shortages? What’s happening in the textile industry amid the epidemic?

There is no doubt that the impact of the epidemic in 2020 on the economy is still continuing. After the US stock market circuit breaker and crude oil plummeted, the next obvious sign is the arrival of the unemp…

There is no doubt that the impact of the epidemic in 2020 on the economy is still continuing. After the US stock market circuit breaker and crude oil plummeted, the next obvious sign is the arrival of the unemployment wave!

Terminal brand layoffs, retail stores closed

△The new crown epidemic has caused a sharp decline in the turnover of the global textile and apparel industry

Data source: ITMF

Chart: New Business Key References

The old American retail giant Macy’s lost money due to the new coronavirus epidemic Lots of business. As of mid-March, it had closed 775 stores. On March 30, local time, Macy’s said that starting this week, most of its 125,000 employees will be furloughed until at least May, and company executives will temporarily reduce their salaries starting in April. The company recently announced that although it has taken measures to contain the financial crisis, the epidemic has dealt a heavy blow to its business, with the closure of many stores causing a significant drop in sales. Since the beginning of 2020, Macy’s stock price has plummeted 70%. After falling to an all-time low on the morning of April 1, the largest department store in the United States was announced to be removed from the S&P Index.

J.C. Penney, a 118-year-old American department store, is considering filing for bankruptcy protection and has been forced to temporarily close 850 stores. The closure of stores has caused its revenue to dry up, and J.C. Penney currently has the funds to support operations for several months. J.C. Penney announced on March 31 that it would extend its store closures and would temporarily put most of its store hourly employees on unpaid leave starting on April 2. Starting from April 5, a considerable number of the company’s office employees and salaried store employees will also take unpaid leave.

H&M admitted in its recent financial report that due to the global outbreak of the new coronavirus pneumonia, H&M’s net sales in March fell 46% year-on-year, and it expected a loss in the second fiscal quarter. . Since mid-March, all stores in some of the group’s largest markets have been closed, with 3,778 of 5,065 stores globally closed, including all stores in Germany, the United States, the United Kingdom, France, Italy and Spain. It is worth noting that H&M stated in its financial report that the situation has become increasingly severe, so the company has taken a series of measures in areas such as procurement, investment, rent and staffing. H&M executives have temporarily cut their salaries by 20%, and the company is currently reviewing whether layoffs are needed.

Zara parent company Inditex Group is considering temporary layoffs, involving about 25,000 store employees in Spain.

In Australia, department store Myer has submitted a statement to the Australian Stock Exchange stating that it will close all stores starting from March 29 for a period of four weeks until April. 27th. In Australia, 10,000 Myer employees will be laid off from March 30, plus the 9,000 laid off by Premier Investments, 3,800 laid off by Flight Center and the layoffs of several large retailers, meaning that the country’s only retail The number of unemployed people in the industry reached more than 40,000 within a week.

The upstream industrial chain is facing many difficulties

As the epidemic abroad is still spreading, Vietnam has received significantly fewer orders this year. Some Vietnamese The export industry will also be greatly affected.

Vietnam’s textile industry will face a sudden loss of orders, which may cause catastrophic losses to many clothing manufacturers. In order to survive this economic winter, Vietnamese manufacturers are rushing to Take steps to control costs. Vinatex, a clothing manufacturer giant in Vietnam, has more than 200 factories and as many as 100,000 workers in the group. However, orders from abroad have decreased, and the company is planning to furlough up to 50,000 workers.

Data from Vietnam’s Ministry of Industry and Trade show that in April and May, orders for Vietnamese textiles and footwear will drop by about 70% year-on-year. Even if the global epidemic eases at the end of May, Vinatex will still lose VND1 trillion (approximately US$42.4 million), which is double its net profit of VND510 billion in 2019.

The CEO of Vinatex said: “According to the current situation, 30% to 50% of job opportunities will disappear by May.” It is worth mentioning that Vietnam The textile industry has been greatly affected by raw material supply problems before. Under the epidemic, Vietnam’s manufacturing industry seems a bit fragile.

Bangladesh is the second largest apparel manufacturer and exporter after China. As the new coronavirus has hit clothing consumption hard, 15,000 workers in Bangladesh’s textile industry have lost their jobs, and some employees have not been paid. The textile and clothing industry is an important export industry in Bangladesh, with more than 4 million employees, most of whom are women. Due to the lack of orders from abroad, especially from Europe, manufacturers have no choice but to lay off workers or stop paying wages. Babur Akhtar, secretary-general of the National Textile Workers Union of Bangladesh, asked foreign buyers not to cancel orders and asked business owners to pay wages and stop layoffs. In his view, company bosses should help workers. This is a matter of justice and in the interests of the bosses.

According to Indian media reports, the Clothing Manufacturers Association of India (CMAI) stated that more than 80% of the Indian garment industry is small and micro enterprises, and most enterprises simply cannot survive 3 to 6 month’s epidemic. According to it, there are about 3,700 registered companies within the association (CMAI), employing more than 700,000 people. If the Indian government does not implement the payroll…Subsidies or assistance measures in the resumption of work plan will lead to a significant reduction in jobs in India’s entire textile industry, and the total number of layoffs may be as high as 10 million. Since the textile industry is an important economic pillar of India, its collapse will have serious consequences. According to the latest forecast from Barclays Bank, comprehensive blockade measures will cost India US$234.4 billion; the Reserve Bank of India recently also admitted that due to the impact of the epidemic, it will be difficult for the Indian economy to achieve a growth rate of 5% in 2020.

Due to the global outbreak of the epidemic, orders from Europe and the United States have dropped significantly, and factories have been forced to apply for a shutdown. Hundreds of thousands of factory workers in Cambodia are facing the dilemma of being “laid off”. In early April, Ken Loo, secretary-general of the Cambodian Garment Manufacturers Association, said in an interview with the media that 74% of people will be unemployed, which is equivalent to about 500,000 employees affected by the cancellation of orders. ”

Picture source: World Journal

Yutala, chairman of the Thai Garment Industry Association, recently stated that before The output value of the entire clothing industry is approximately 200 billion baht. However, due to the severe impact of the new crown pneumonia epidemic on Thailand’s clothing industry, brand companies and foreign buyers have postponed orders or even canceled orders, causing the entire Thai clothing industry to lose more than 70% of orders. As a result, more than 250,000 people in the garment industry may face unemployment.

The resilience of the domestic textile industry is still there

People on the 21st The Ministry of Social Affairs released the “Ranking of the 100 Shortage Occupations for National Recruitment in the First Quarter of 2020”, and many positions in the textile and clothing industry are on the list.

Among them sewing Workers ranked high for two consecutive times, and the demand cities are widely distributed across the country. The rankings of spinners and weavers have also improved, with the main demand coming from major textile provinces such as Anhui, Xinjiang, and Guangdong. Cutting workers are new to the list. The demand comes from Heilongjiang, Hubei and the Yangtze River Delta.

This job search ranking reflects on the one hand the impact of the epidemic at the beginning of the year on traffic congestion and the shortage of workers in various industries when they resume work. It also illustrates the domestic The resilience of the textile industry lies. With the initial control of the domestic epidemic in March, the situation of textile enterprises resuming work has improved significantly, and labor demand has increased.

However, as the epidemic spread to the world in late March, textile foreign trade orders fell sharply. After resuming work, domestic textile companies faced greater operating pressure due to a significant reduction in new orders. According to recent news, some large textile companies have decline, we have to resort to taking turns, holidays, etc. to barely maintain production.

It is reported that Lanxi, Zhejiang, a famous domestic cotton elastic gray fabric production base, currently has product inventories of more than 40 days. Enterprises began to implement production restrictions in the form of changing from three shifts to two shifts and taking turns to take machine breaks to relieve inventory pressure.

One of the world’s largest pure cotton shirt manufacturers, Esquel Group On April 20, it announced that it would close four factories in China, Malaysia, and Mauritius in the near future. This signal shows that as shrinking terminal demand is transmitted to the upstream, leading companies in the industry have pessimistic predictions about the later situation, and the textile industry will still face greater operating pressure in the second and third quarters.

Of course, there is no need to be overly pessimistic for domestic textile companies. The current domestic epidemic control effect is the best in the world. , China’s textile industry has the most complete industrial chain, and has stronger recovery capabilities than Southeast Asia. Once terminal demand stabilizes, it can quickly put into production and seize market share. Secondly, the domestic consumer market is huge, and with the start of domestic demand, it can drive the recovery of the entire textile industry. What is certain is that domestic demand will precede foreign trade demand, and the textile industry in Southeast Asian countries is extremely dependent on the European, American and Japanese markets, and the domestic demand market is not enough to drive industry development. </p

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