Truong Van Phong, deputy head of the HCM City Export Processing and Industrial Zones Authority (HEPZA), said the company's sole owner had decided to dissolve the business.
Company executives directly informed employees that production and business operations at the Bau Bang Industrial Park factory would cease from 2 pm on November 2. The company employs 1,611 people, including 259 outsourced workers.
The company attributed the decision to difficult economic conditions and declining market demand over several years. Its parent group, ECCO, said it wanted to restructure its global manufacturing network amid significant excess production capacity.
The group plans to end its Vietnam operations and focus on expanding production at its headquarters in Denmark and other existing factories as part of its long-term sustainability strategy.
ECCO Vietnam Co Ltd informs workers of the decision to dissolve the company (Screenshot: Tiktok Lidan6677).
In a video posted on social media by workers, a company representative stressed that the decision was driven by global business and production requirements, rather than the performance, capabilities or commitment of its Vietnamese workforce. The representative also acknowledged employees' contributions to the company.
According to the company's notice, employment contracts for most workers will end on November 30.
A small number of employees will remain for several months to help complete the dissolution process in accordance with regulations. They will be informed separately about further working arrangements. For those not offered continued employment, contracts will end on November 30 or on their existing expiry dates, whichever comes first.
From November 3 to 30, employees are not required to report to the factory or office unless instructed otherwise by the company.
Phong said HEPZA, the HCM City Labour Federation, local authorities and representatives of the industrial park's infrastructure developer met with company executives and union representatives on the afternoon of November 2.
At the meeting, authorities provided guidance on procedures for terminating operations and discussed arrangements for employee benefits and job placement.
Following the meeting, the company agreed on a benefits package and issued a notice outlining payments to workers.
Production would continue until 2 pm on November 2. October salaries have already been paid, while November wages will be calculated through November 30, despite employees not being required to work during that period.
The company also pledged to pay a 13th-month salary to all employees, including those on maternity leave. Payments will be calculated pro rata based on each employee's actual working period during the calendar year up to the termination of their contract, in line with the company's established policy.
Human resources staff will be available to assist employees with salary, benefits, insurance and other entitlements.
November wages and all support payments are to be paid no later than November 30. The company also confirmed that it has no outstanding social insurance contributions.
HEPZA is working with trade unions and relevant agencies to connect affected workers with nearby businesses in need of employees with suitable skills.
At least 12 companies had expressed interest in recruiting former ECCO Vietnam workers, with several businesses sending representatives directly to the factory to recruit staff on the afternoon of November 2, Phong said.
