Foreign business group leaders project massive layoffs in Q1

HCMC, SGT, Jan 8, 2009. Several leaders of foreign business groups have predicted the worst in massive layoffs at companies operating in Vietnam will come in this first quarter because of dwindling orders from overseas and scaled-down business.

Thomas Siebert of the American Chamber of Commerce in Vietnam (AmCham Vietnam) said about two-thirds of U.S. imports from Vietnam were consumer goods which include apparel (42%), footwear (12%), and furniture (11%).

“These categories of goods suffer in the consumer downturn, making it likely that Vietnam’s exports to the U.S. will drop in 2009. This will reduce export earnings, and more importantly, will reduce employment in Vietnam,” said Siebert, who is chairman of AmCham in HCMC.

Siebert furthered consumer spending had dropped sharply in the U.S., down 8% in December last year compared with the same earlier period, and that all sectors were hit.

Siebert said Vietnam’s major export markets were in recession.

“The U.S., which accounts for 26% of Vietnam’s exports, EU, 19% and Japan, 16% are all in recession, which will most likely last until the end of 2009 or mid-2010,” he said.

However, Siebert and other executives of foreign business groups in Vietnam asked by the Daily said they had not heard of any major layoffs among member companies of their business groups.

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