- J&S Fashions considering shutting down, laying off 1000 workers,
- TZICC factory also planning to downsize citing low demand.
IT never rains but pours for the country’s textile workers. This as it appears another jobs carnage is looming with the Thetsane-based J&S Fashions Company planning to shut down and retrench its entire 1000-strong workforce.
Another Thetsane factory, TZICC Clothing Manufacturers, is also planning to “temporarily” lay off 600 of its 800 staff complement. The two companies produce a range of clothing products from tee shirts to fleece wear.
Both J&S Fashions and TZICC have cited low demand in their main United States (US) source market for their decisions to shut shop and downsize respectively.
There are no timeframes for the implementation of the planned moves as both factories are currently in talks with labour unions.
Lentsoe La Sechaba Workers’ Union (LESWU) secretary general, Monaheng Mokaoane, confirmed they were in talks with the two factories over the planned retrenchments.
He said they doubted the truthfulness of the factories’ claims that there was low demand for their products especially as most other factories appeared to have resumed full production and exports to the US in terms of the African Growth and Opportunity Act (AGOA) trade concession which allows them to export their products duty-free.
“We are currently in talks with J&S and TZICC factories regarding possible retrenchments they want to make,” Mr Mokaoane said.
“The two factories are citing lack of orders from their international buyers as the reasons for wanting to retrench their workers. J&S wants to shut down while TZICC is looking to temporarily lay off some of its workforce and introduce rotational shifts for those who will remain behind,” Mr Mokaoane added.
He said the likely reason for the factories’ planned moves was to arm-twist the government and the unions not to award workers the 15 percent increment they were demanding for the 2022/23 financial year.
He said workers and employers were currently deadlocked in the negotiation process because the textile owners were offering a paltry three percent hike. Employers in other sectors outside the civil service are offering a four percent increment.
The government has proposed a six percent increase across the board in an attempt to break the stalemate between the workers and employers.
The Ministry of Labour and Employment’s Wages Advisory Board (WAB), has since invited the public to comment on its proposed six percent minimum wage increment.
Commenting on the two factories’ plans, Mr Mokaoane said, “it is surprising to hear that the factories want to retrench workers due to an alleged lack of orders while other factories in the same line of business are exporting to the same market without any issues.
“They are probably doing this to sway the ongoing minimum wage negotiation process in their favour.”
J&S Fashions management were not reachable for comment on the matter.
TZICC managing director, David Chen, confirmed that they were planning to downsize operations.
He said they had initially planned to retrench workers but after talks with unions, they would now be temporarily laying off some employees until demand for their products had improved.
“We are not retrenching workers as we had initially planned. We have talked to the workers’ representatives and will now just lay off some workers temporarily.
“We are doing this because our orders have terribly gone down in recent months. The buyers are complaining about our high prices. Our production costs have gone up. You will recall that last year, the wages for our employees were increased and this has caused our production costs to shoot up and the prices for our products are now too high for the market,” Mr Chen said.
This was in reference to the 14 percent hike that factory workers were awarded for the 2021/22 financial year. Workers in other sectors got a nine percent increment.
The increments came on the back of a violent strike by factory workers from 10 May to 7 June 2021.
The factory workers were demanding a 20 percent increment while the other sectors wanted 17 percent increment for the 2021/22 financial year. The employers were however, only prepared to offer a six percent wage hike.
In the protracted industrial action, two workers died in clashes with the police and the army while shops were looted and vandalised by angry workers in the Thetsane industrial area, Maseru.
The retrenchments are a continuation of the jobs haemorrhage which has taken a devasting toll on factory workers since the advent of the Covid-19 pandemic in 2020.
In December 2021, leading textiles conglomerate, Nien Hsing Textiles Group, closed down its C&Y Garments subsidiary in Maseru, rendering 2700 workers jobless.
Three months before that, the Group had also closed its Nien Hsing International subsidiary, also in Maseru, sending home another 2700 workers.
Group general manager, Ricky Chang, blamed the Covid-19 induced slump in demand for their products for the lay-offs. All in all, the company laid off 5500 workers in 2021.
Before that in 2020, the Group had closed its Glory International subsidiary and laid off 1500 workers. This means that the company retrenched 7000 out of its 10 000- strong workforce in the period 2020 to 2021.
Mr Mokaoane this week said they had requested a meeting with Trade and Industry Minister, Thabiso Molapo, to get the government to pronounce itself on the worsening unemployment situation in the textiles sector.
“We want the government to speak out on the looming retrenchments, including the previous ones by other factories as they have been quiet since the job cuts started in 2020,” Mr Mokaoane said, adding the meeting had been pencilled in for Monday.
He said they will be joined in that meeting by other trade unions, namely, the National Clothing, Textile and Allied Workers Union (NACTWU); Independent Democratic Union of Lesotho (IDUL); and the United Textile Employees (UNITE).
Contacted for comment, Trade and Industry Minister Molapo referred all questions to the Lesotho National Development Corporation (LNDC) — a parastatal tasked with investment promotion.
At the time of going to print last night, the LNDC had not responded to the written questions sent to it.