- Global International says they are only being “temporarily laid off” due to lack of orders,
- they face a bleak Xmas as they will not be paid while on forced leave
Seithati Mphatsoane/Hopolang Mokhopi
IN a move that spells further doom and gloom to the economy and thousands of livelihoods, denim wear manufacturing company, Global International, has begun sending home its 3000-plus employees.
The company says the workers are being temporarily laid off due to the lack of orders from the United States (US) market which is currently the sole consumer of its products. After sending the workers home, the company’s management says the firm will then shut down for two months and resume operations in January 2023.
The exact date for the shutting down of the company remains unclear. Workers who spoke to the Lesotho Times this week said operations ceased on 31 October while the company said that it would be shut down soon and re-open on 4 January 2023.
The development means that the 3000-plus workers are headed for a bleak Christmas as the company follows a strict no work, no pay policy.
Incidentally, Global International is a subsidiary of the leading textiles conglomerate, Nien Hsing Textiles Group, which laid off about 7000 workers between 2020 and 2021 citing low demand for its products in the US.
There used to be five factories in the Group before some of the subsidiaries were shut down in 2020 and 2021. The first to be shut down was Glory International, rendering 1500 workers jobless in 2020. Two other subsidiaries, Nien Hsing International and C&Y Garments, were closed last year, sending home a combined 5400 workers in the process.
This has left Global International and Formosa Textiles as the only subsidiaries still open but these two are also in trouble.
Group manager, Ricky Chang, this week confirmed that Global International was in the process of temporarily laying off its workers.
Mr Chang blamed the “low business from our markets in the United States” for the move.
“We are not closing down for good. We are only temporarily shutting down because of the low demand for our products in the US.
“We have been sending the workers home and we are doing it in stages. They will stay at home for two months and only come back next year from the 4th of January. The whole factory is affected by this. We are talking about 3000-plus employees who will be temporarily laid off. This will be an unpaid leave.
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“The situation is not as bad for the workers at Formosa. Those who are producing spun thread (yarn) will still be coming to work as normal but those who are producing denims will be coming to work for fewer days than normal because of reduced orders,” Mr Chang told the Lesotho Times this week.
According to some workers who spoke to this publication this week, the “temporary” layoffs began on 10 October 2022 with the last batch being sent home on 31 October.
They said management had told them it would only send for them and resume operations sometime in January 2023. The re-opening would only take place if there are new orders, the workers said.
Given that the company only pays employees for actual work done, the layoffs mean that the workers will face a bleak Christmas without any income to fend for their families.
In an interview, one of the workers, Thabo Koloi*, said his was a desperate situation as he did not know how he would fend for his family.
“Workers who cut the denim material used to make jeans were the first to be sent home on the 10th of October,” Mr Koloi said.
“The second group to be sent home on 21 October were sewing-line and ironing staff. They were followed by assembly line staff who were sent packing on 25 October. The packing-line and washing-line workers were the last to be laid off on 31 October. Thereafter, the company management said they would suspend operations until sometime in January next year.
“This is really hard for me. I wasn’t earning much but even that little amount won’t be coming while I’m not at work. I really don’t know how I’m going to fend for my family. I won’t even be able to pay school fees for the last quarter of the year for my children. I won’t be able to buy them any clothes and goodies for Christmas as I normally would have done at this time of the year,” Mr Koloi added.
His sentiments were echoed by another worker, Thabiso Mohapi*, who said, “This is a very stressful period for me as I will not be able to cater for my family’s needs”.
Another employee, Khotso Lerata*, said Global International began downsizing its operations in September this year.
She said their working days had been reduced to four per week from the normal five.
“We were told that this was because there was low demand for our products.
“In all the years I have worked in the textiles sector, we have never been laid off ahead of the Christmas holidays. This has caused us a lot of stress. There’s no way I will be able to buy my children new clothes or cater for other expenses particularly during the Christmas holidays,” Ms Lerata said.
The situation is said to be bleak for Formosa workers as well.
They said their working hours had been reduced to just two weeks per month.
All in all, a massive 11 500 job losses have been recorded in the textiles sector from March 2020 to 31 December 2021. Before then, there were 45 000 employees in the sector. This means that altogether, a staggering 25 percent of the workers have lost their jobs in a sector considered to be the largest employer outside government. A United Nations Development Programme (UNDP) report titled: Assessment of the Socio-Economic Impact of Covid-19 on the Kingdom of Lesotho 2019, states that the manufacturing sector contributed 14, 2 percent to gross domestic product (GDP) and made up 16, 4 percent of all formal jobs. The report adds that the textiles industry is the second largest formal employer, after the government.
Most of the job cuts have been at the Nien Hsing Textiles Group, which has attributed the retrenchments to the deleterious effects of the Covid-19 induced slump in the demand for its products.
However, some players in the industry have said the real reason for the Group’s predicament is that for several years it engaged in doggy business practices including failing to pay taxes to the Revenue Services Lesotho (RSL).
“Isn’t it odd that of all the textile firms, Nien Hsing Textiles Group, is the only company to have retrenched so many workers? Other companies have not retrenched workers at the same rate as the Group. Surely Covid-19 and low demand would not affect them alone. The truth of the matter is that the Group has been engaging in shady dealings and even failing to pay its taxes. Now that the taxman is on their case, they have been having cash flow problems. The retrenchments could also be part of a ploy to get the government to write off the tax debt,” said one source.
When this was put to Mr Chang, he denied that his company owed any taxes. He insisted that they were just a victim of a depressed US market.
Whatever, the real reasons, the massive job cuts are likely to worsen the already endemic poverty in the country and spawn a new wave of crime, analysts have warned.
Equally, if not more importantly, the retrenchments will reverse the significant gains that have been made to empower women. This is because the majority of textile workers are women.
The new Sam Matekane-led government would have to act fast to meaningfully leverage on the African Growth Opportunities Act (AGOA) trade concession by the United States (US). Instead of exporting just textiles and apparel, Lesotho should explore other products that it can sell to the US market. For instance, the government will have to take a leaf from neighbouring South Africa which exports a wide variety of products under AGOA from agricultural products to automobiles worth billions of maloti annually.
In addition, the government will have to lead the way in finding other markets for locally produced goods instead of relying on the US and South Africa only.