In the first five months of 2020, over 5 million workers in Vietnam have lost their jobs or faced a reduction in working hours and income due to the Covid-19 pandemic, according to Le Van Thanh, vice minister of Labor, War Invalids and Social Affairs.

Over 5 million workers in Vietnam affected by Covid-19. Photo: MoLISA.

Many enterprises and businesses have been forced to scale down or suspend operations as the Covid-19 pain grows, Thanh said at an online conference discussing measures to support job creation and sustainable business in a new normalcy on June 3.

According to Thanh, nearly 86% of Vietnamese enterprises have been affected by the pandemic, especially those operating in the fields of manufacturing and processing, wholesale, retail, logistics, catering and hospitality services.

During the nationwide social distancing campaign, over 80% of workers in informal sectors had to stay at home for over a month.

Additionally, the rate of workers joining the workforce in the first quarter recorded a 10-year low with 75.4% of the population aged 15 and over, down 1.3 percentage points year-on-year.

Nevertheless, Thanh said since May, more and more people have been looking for jobs, with 70,000 – 80,000 on average returning for work per month. However, things could hardly return to normal as enterprises continue to face difficulties from weak export orders.

Nguyen Thi Quyen, deputy director general the MoLISA’s Department of Employment, said in the January-May period, over 430,000 people filed claims for unemployment benefits, up 28% year-on-year, while the figure in May was nearly 160,000, up 55% month-on-month and 45% year-on-year.

Vice Minister Thanh said the government is considering to use VND3-5 trillion (US$129.5-215.83 million) from the Unemployment Insurance Fund to support enterprises in retraining workers and adapting to new changes in the labor market.

Experts said a disciplined return to work is key for economies to recover.

Sam Haggag, CEO of Manpower Group at the Asia – Paficif region, said in preparation for a new normalcy, cooperation among the government, enterprises and labor unions is a key factor. 

Haggag said in the post Covid-19 period, a disciplined return to work is key for economies to recover, adding aviation industries and ride-hailing companies in a number of countries such as Singapore, Malaysia, and Thailand have poured huge resources to reallocate their workforce.

Simon Matthews, CEO of Manpower Group in Vietnam, Thailand and the Middle East, expected 84% of firms and organizations in 2020 would hold training classes for employees.

Up to 7.2 million workers furloughed in worst scenario

Quyen from the MoLISA’s Department of Employment said there are three scenarios for Vietnam’s labor market.

In case the world starts getting the pandemic under control, the number of people losing jobs per month would be around 70 – 80,000; 70 – 75% enterprises would be affected by the pandemic; and 3 – 3.5 million workers will be on furlough.

In a second scenario where the pandemic turns complicated, around 80 – 90,000 people would lose jobs per month, 80% enterprises would be affected and 5 – 5.6 million workers will likely be furloughed.

For the worst-case scenario and Vietnam is heavily impacted, up to 100,000 people would lose jobs per month, 90% of enterprises would be affected and 6.1 – 7.2 million workers will be forced to take unpaid leave.