|Workers face salary cuts as firms fight to survive amid COVID-19
At present, the nation is home to over 55 million employees, of which approximately 15 million currently work for businesses, with more than 9 million working in cooperatives or individual non-agricultural establishments, according to a recent report regarding the impact of the COVID-19 on the country’s employment situation conducted by the Ministry of Labor, Invalids and Social Affairs.
Elsewhere, the number of employees working in enterprises in other sectors has climbed to 8.8 million workers.
According to a recently released report by businesses, due to the effects of the COVID-19 epidemic, roughly 10% of firms have been forced to narrow down their production scale in February, whilst the figure rose to 15% at the beginning of March as a result of the complicated nature of developments regarding the COVID-19 epidemic.
Evidence for this can be seen by looking at enterprises in the textile and garment sector who have had to reduce the hours of nearly 2.8 million workers, while many other businesses have implemented other measures such as asking their workers not to work overtime, especially on Saturdays and Sundays.
Air transport service, rail, road transport, and other supporting service sectors employ approximately 500,000 people, of which air transport has seen wages slashed by between 20% and 40% depending on the specific position.
Despite facing a reduction in wages, workers have yet to be laid off. In the event of a prolonged epidemic, it is likely that thousands of workers in the industry will face losing their jobs.
Businesses that operate in the field of tourism, accommodation, and catering services that have more than 500,000 employees, are also likely to encounter numerous difficulties in terms of loans, bank interest rates, and rent costs which have forced them to suspend operations.
In addition, these enterprises have also been forced to scale back wages, reduce shifts, or leave employees unpaid so that they are capable of returning to work immediately as soon as business activities rebound.
Decreasing recruitment demand
The impact of COVID-19 epidemic on the labour market has also been reflected by indicators such as labour demand across all localities falling by between 20% and 30% in comparison to the same period last year, with reductions of 40% in Ho Chi Minh City and 36.7% in Hanoi.
According to the Ministry of Labor, Invalids and Social Affairs, this decline in recruitment demand can be attributed to the huge impact of the COVID-19 on the most labour-intensive industries such as textiles, aviation, services, and tourism.
The fall can also be ascribed to a shortage of raw materials coming from China, a drop in the number of visitors from China, the Republic of Korea, and Japan, along with the suspension of visas for those wishing to visit Vietnam.