Dhaka: The readymade garments factories can now use only half their workforce due to the coronavirus crisis, which may lead them to shed jobs from June, Rubana Huq fears.

She says the owners are ready to work with the government for the rehabilitation of the workers who are losing their jobs.

The chief of BGMEA, the apparel exporters’ lobby, took questions from the media about the situation during a virtual news conference on Thursday.

The media call was organised to mark the inauguration of a coronavirus testing lab for the workers.

According to Rubana, as many as 1,926 of the 2,274 factories registered with the BGMEA are operating after the foreign buyers cancelled or postponed orders due to the pandemic that has hit global consumption as well.  This means a number of factories are closing.

“Many are asking about layoffs. The layoffs will actually be counted from Jun 1. This is an unexpected reality. We have nothing to do now. Because we will have the layoff option only if the factories continue using 55 percent of their capacity,” she said.

She appealed to the government to find a solution so that “all can ride out the crisis together”.

“But there will be layoffs,” Rubana maintained.

She also said the sacked workers will be prioritised when the situation improves.

However, speaking to bdnews24.com later, the BGMEA chief said she did not announce that the workers will be sacked within June.

“Such headlines are an attempt to stir trouble in the garment sector. What I said is that the overall cut in orders led the factories to use only 55 percent of their total capacity in June, which may cause layoffs.

The second-largest apparel exporter after China, Bangladesh makes more than 80 percent of its exports earnings from the sector. The majority of around 4 million workers in the sector are women.

The $40 billion sector was hit hard when the outbreak started in the US and Europe in February. The BGMEA said Western buyers cancelled or postponed orders worth $3.15 billion while many exporters did not get the money after delivery.

The association could not say how many workers were affected after 338 factories closed. The government has provided the exporters with bailout funds to pay the workers but several media reported many owners did not clear the payments before Eid-ul-Fitr.

Data shows over 2.4 workers of 2,182 factories registered on the BGMEA received their salaries for March until May 24. In April, 1,926 factories were operational and 1,878 of them paid the salaries for the month.

Besides not getting paid, there is growing fear over their future among the workers who have joined work despite infection risks.

Rubana said the crisis has cost Bangladesh’s apparel sector $5 billion in three months from March.

“I don’t know what will happen in July,” she said and predicted that Bangladesh will suffer a 30 percent drop in orders in future.

The exporters will finally be able to bring $23 billion in 2019-20 fiscal year, she reckoned.

According to the BGMEA chief, the buyers agreed to re-order 26 percent of the cancelled or postponed orders after discussions, but with new payment conditions.

Those who had wanted to pay the money immediately will now pay after at least 180 days while some others agreed to receive the deliveries next year but refused to talk about a payment deadline.

“Some are asking for discounts, some others are not willing to talk about payment at all,” she said.

Many factories bought yarn and textile to make clothes following orders but the buyers stopped communicating, according to her.

She hoped business will be good in the West during Christmas.

https://bdnews24.com/business/2020/06/04/coronavirus-crisis-may-trigger-layoffs-in-bangladesh-bgmea-chief-rubana-fears