The number of jobless workers requiring unemployment subsidies in Hanoi has surged drastically in recent months as production firms scaled down or even shut down their business due to economic downturn.

According to Hanoi Employment Service Center, in October the center approved applications for unemployment allowances for 2,300 ex-workers.

The number of applicants has gradually increased over the months, to 1,900 in September from 1,500 in August, taking the total number of applicants for unemployment subsidies to 16,000 in the first ten months of the year, more than five times bigger than 3,000 of the whole 2010.

Nguyen Thi Kim Loan, head of the Center’s Unemployment Service Department, showed concerns over the impacts of the economic downturn on laborers.

“It is worrying that the number of unemployment subsidy applicants has been increasing gradually recently. The biggest reason is that companies have to reduce their production because of economic downturn,” she said.

She cited the en-masse layoffs, at between 50 and 100 workers each from Rang Dong Light Source and Vacuum Flask Company, Railway Joint Stock Company, Ha Dinh Garment Company, and Electricity Equipment Company.

Loan said these companies sacked employees to restructure their business, while many others quit their jobs as their monthly salary at VND1.8 million is too small for them to make ends meet in the context of high inflation.

Loan forecast the number of subsidy applicants would rise in the near future because companies would have to reduce their production.

The economic downturn has its footprints on Hanoi-based businesses.

Deputy Director of Hanoi City’s Department of Planning and Investment Nguyen Van Tu said the city’s index of industrial production had reduced gradually from January, May and October, reflecting the weakened health of businesses.

“This is abnormal compared with other previous years. The index should have been up towards the year’s end because businesses normally speed up production for Tet,” Tu said.

He quoted estimation of the Hanoi Taxation Department, saying that 2,800 enterprises had shut down business in the first 10 months of the year. The number averaged out at 400 in each of the previous years.

Tu said his department forecast 5,000 businesses would go bust in Hanoi by the year end, while some 14,500 new businesses were licensed in the first 10 months of the year. Hanoi now has some 130,000 businesses.

SGT