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No ‘announcement’ made on layoffs: BGMEA

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bgmeaBangladesh Garment Manufacturers and Exporters Association (BGMEA) on Saturday said its president Dr Rubana Huq did not “announce” anything about job cuts in the industry from June - although it wasn’t taken as such anyway.

Amid widespread criticism after their president rather casually stated, during a webinar on the industry earlier in the week (the recording is thus available for everyone to make their own judgement), that job cuts from June would be an “unexpected reality” everyone must accept, the apex body of the country's apparel industry released a statement asserting the media did not present the matter objectively.

The Bangladesh Confederation of Labour (BCL), comprised of the direct stakeholders in any such occurrence, objected to the statement by the BGMEA president on Friday on grounds of “an irresponsible” attitude for having talked about prospective layoffs so lightly as inevitable, as if to normalise it.

“As an organisation, we have no scope to make such an announcement. The BGMEA President expressed her deep concern over the decline in employment and possible layoffs,” reads the media statement sent by BGMEA Acting Secretary Maj (Retd) M Rafiqul Islam.

According to BGMEA, the industry has seen a 14 percent decline in growth in the first ten months of the current financial year (July 2019-April 2020) which it says is the most negative growth figure for the industry in the last five years.

Also within the period of May 1 to May 20, the RMG industry recorded a whopping negative 55.7 percent growth, BGMEA said.

RMG orders worth over US$3 billion have been canceled since March this year, they said.

The BGMEA Secretary noted that there have been examples of factories running at 35 percent capacity. “Even the larger factories are not able to use more than 80 percent of their capacity.”

The data for the month of June suggests RMG factories are continuing production activities using an average capacity of 55 percent, according to BGMEA.

Currently, BGMEA-enlisted 1926 RMG factories are operational in the country as 346 have been shut down in the last two months.

“If the situation continues, the rest of the factories will either shut down one by one or work at low capacity," reads the statement.

The BGMEA expects both the owner and the worker will respect the labor law if any factory is forced to lay off employees.

According to McKinsey & Company data, the global garments sector will see a 30 percent decline in sales revenue in 2020 due to COVID-19. As a result, Bangladesh will lose approximately 10 billion dollars in RMG export.

Bangladesh readymade garment industry helps earn around 83 percent of the export earnings that the country counts annually.

Bangladesh was eyeing to earn US$ 50 billion through exporting apparel products which is now more than $32 billion every year.

The government of Bangladesh has announced a $588 million stimulus package for the RMG sector to pay wages which employs more than four million workers, mostly women.