…as jobs bloodbath mounts in the textiles sector
Bereng Mpaki
DENIM wear manufacturing company, C&Y Garments, has begun retrenching 2600 employees as it prepares to shut down at the end of the month.
Some of the workers have already been sent home while others are currently serving out their employment termination notices, the employees and their trade unions have said.
The retrenchments and impending closure of C&Y Garments is set to swell the ranks of the unemployed in the country. They currently stand at over 300 000, according to Prime Minister Moeketsi Majoro. This spells further doom to the economy which has already taken a huge hit from the Covid-19 induced slowdown in global business activity.
C&Y Garments manufactures denim products for export to the United States market under the African Growth and Opportunity Act (AGOA) facility which allows Lesotho to export goods duty-free to the US.
The factory is part of the larger Nien Hsing Textiles Group, which originates from Taiwan. The group has four textile factories in Lesotho, which collectively employ about 10 000 workers.
The four factories are Nien Hsing International, Global International, C&Y Garments and Formosa Textiles. In September this year, Nien Hsing International retrenched 2500 workers and retained a skeletal staff of 200 due to what it said was a decline in the demand for its products.
The fifth factory, Glory International, closed last year sending home 1500 workers. This means that by the end of next month, the Group would have retrenched 6600 workers in just a year.
This is a massive jobs haemorrhage considering that the Lesotho National Development Corporation (LNDC) has reported that at least 6000 workers lost their jobs within the manufacturing sector from March 2020 to March 2021 mainly due to the negative impact of Covid-19 on global economic activity.
Prior to last year’s retrenchments, the government had put the number of factory workers in the country at 45 000. Given the LNDC reports of 6000 job losses since last year, this means that the total number of those who would have been retrenched by end of next month will be 11 100. In other words, a staggering 25 percent of the entire workforce would have lost their jobs since last year.
Nien Hsing Group manager Ricky Chang could not be reached on his mobile phone for comment yesterday.
However, one of the termination letters given to the workers on Monday indicates that C&Y Garments will be shutting down due to the low demand for its products.
“Due to the Covid-19 pandemic, uncertain market outlook and continued operating losses, the company would have to suspend NH1 (C&Y Garments) operations,” the termination letters state.
“After numerous consultations, the factory management regrets to inform you that your employment will be terminated. You are given one month’s notice.
“Once job vacancies become available in the future, the human resource office will contact you to determine your willingness for re-employment. Your understanding and cooperation will be much appreciated,” the letters further state.
C&Y Garments is referred to as NH1 because it was the first company to be established in Lesotho under the Nien Hsing Textiles Group.
Its closure will mark the end of a 31-year era for the company which began operations in 1990.
There is more than just nostalgia as the closure of the decades-old company will throw thousands of Basotho onto the streets, National Clothing, Textile and Allied Workers Union (NACTWU’s) deputy secretary general, Tšepang Makakole, said yesterday.
“We are just as numb as the workers over the on-going retrenchments at C&Y factory which is planning to shut down at the end of the month.
“This is especially saddening and overwhelming because Nien Hsing International recently retrenched 2500 workers while Glory International laid off 1500 before closing down last year,” Mr Makakole said in an interview with the Sunday Express.
United Textile Employees (UNITE) secretary general, Solong Senohe, said this month’s pay cheque will be the last for workers before C&Y shuts down.
“The November salary will be the last one the workers will get before the company closes down. All in all, more than 2600 workers will lose jobs when the factory shuts down,” Mr Senohe said.
One of the C&Y workers who spoke on condition of anonymity because she is not allowed to speak to the press, said they were devasted over the impending closure on the company.
She said the retrenchment exercise was being done in phases and workers in the cutting and sewing departments had already been sent packing.
She said she and her colleagues in the washing and packing department had on Monday been served with retrenchment letters, indicating that they would be released at the end of the month.
“This (looming retrenchments) have hit us very hard because we are the breadwinners in our families. Most of us have no husbands and we are the heads of our households. We are both mother and father figures in our families. Therefore, the loss of income is devasting. It is more than we can bear.
“There have been stories of some of our colleagues at Nien Hsing International collapsing and dying due to the shock of losing their jobs. So far, we haven’t heard of any such reports at C&Y and I hope it won’t happen. Nevertheless, it will be tall order to fend for our families after the loss of our jobs,” the female employee said in an interview with this publication.
The retrenchments are proceeding despite the LNDC having set up a task team what it said was a “high-level problem-solving forum” led by the Minister of Trade and Industry, Thabiso Molapo, to address investors’ grievances and stop the job cuts.
The Lesotho Textile Exporters Association (LTEA) had warned that its members were considering laying off thousands of workers, as the salary hikes earlier this year had made their operations unsustainable.
Back in June, the government awarded a 14 percent salary increase to textile workers. Other sectors were awarded a nine percent wage increase for the 2021/22 financial year.
The salary hikes came on the back of violent worker protests for better pay from 10 May to 7 June 2021.
The workers complained that the cost of living had gone up since their last wage adjustment in 2019. They wanted a 20 percent salary increase for the current 2021/22 financial year, while their employers were offering six percent.
They were also demanding the retrospective publishing of the minimum wage gazette for the 2020/21 financial year which was never issued after employers pleaded that they were financially constrained due to the negative effects of Covid-19. Although the wage increments were meant to cushion the workers who had been hit hard by the rising costs of living, they appear to have had the unintended effect of killing the goose that lays the golden egg- the textile companies. Thus, the forum which was set up by the LNDC in August this year, is powerless to stem the tide of job losses.
Both the LNDC and Minister Molapo were not reachable for comment yesterday on the ongoing retrenchments and looming closure of C&Y Garments.