The Ministry of Labor, War Invalids and Social Affairs (MOLISA) reported that 22,700 businesses temporarily stopped operation in the first four months of 2020, an increase of 33.6 percent over the same period last year.

Nearly 14,000 businesses have stopped operation following procedures to be dissolved, while 5,277 businesses have announced dissolution and 5,776 businesses are following procedures for dissolution with tax agencies.

Nguyen Van Hung, director of the HCM City Statistics Office, said at the meeting discussing the socio-economic situation in May that 85.4 percent of 16,300 surveyed enterprises which account for 12 percent of total operational enterprises have suffered from Covid-19.

Enterprises have had to cope with markets narrowing, material supply interruptions and input cost increases.

More than 49 percent of businesses affected by Covid-19 complained that the domestic market has shrunk, 15.3 percent said products cannot be sold domestically, and 42.4 percent cannot implement production and business activities.

In the first five months of 2020, the HCM City Department of Planning and Investment completed procedures to dissolve 2,015 businesses, an increase of 16.4 percent over the same period last year.

In the first five months of 2020, the HCM City Department of Planning and Investment completed procedures to dissolve 2,015 businesses, an increase of 16.4 percent over the same period last year.

Since the beginning of the year, 7,257 businesses in the city have halted operation, up by 40 percent compared to the same period. 

Many enterprises in the southern key economic zone have or are planning to lay off workers to cut costs.

Tran Thi Dieu Thuy, chair of the HCM City Labor Federation, said the enterprises which laid off high numbers of workers are mostly labor-intensive ones, making products for export to the US and Europe.

Since Covid-19 has not been contained in export markets, enterprises are seriously lacking orders, which has forced owners to scale down production and lay off workers. Shoemaker Hue Phong and PouYuen, for example, have decided to sack thousands of workers, though they initially tried to maintain the workforce.

According to the Binh Duong Customs Agency, hundreds of large import/export companies have suffered from Covid-19, resulting in a sharp fall in import and export turnover.

As money is ‘buried’ in materials and goods which remain unsold, enterprises are facing difficulties in cash flow. Local footwear and garment companies reported that the number of orders has dropped by 60 percent compared to same period last year.

As of the end of May, 280 enterprises in the province had stopped operation with 144,000 workers affected.

Meanwhile, MOLISA reported that 5 million workers have lost their jobs, or saw their income decrease because of reduced working hours in the first four months of 2020.

Le Ha

Vietnam faces highest unemployment for a decade

As of June, 30.8 million people aged over 15 have been laid off, lost jobs or got fewer wages due to fewer work hours because of Covid-19, according to the Department of Employment.

Unemployment rate in urban areas almost doubles that in countryside

The unemployment rate among those aged 15 and above in Vietnam stood at 2.05 percent last year and the figure in urban areas is almost double that of rural areas, the 2019 population and housing census reveals.