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Taiwan's Footgearmex Footwear to lay off workers at Vietnam plant

HANOI, Nov 3 (Reuters) - Taiwanese shoemaker Footgearmex Footwear Co Ltd is preparing to lay off two-thirds of the workforce at its Ho Chi Minh City plant, according to a company announcement to employees, blaming a "drying up of orders and financial issues".

Vietnam is a major production centre for global brands and last month the labour confederation in the city said textile, footwear and electronics factories had lost orders due to difficulties sourcing raw materials and weak demand.

Footgearmex Footwear, which supplies brands such as K-Swiss and Timberland Footwear, employs 1,800 people, though is a smaller player compared with other Taiwanese peers in the sector.

"We have tried everything we could but are unable to maintain current production," Footgearmex Footwear said in a circular to workers reviewed by Reuters. The company said it would have to terminate the labour contracts of 1,185 workers from Dec 1.

Phone calls to the company's office in Ho Chi Minh City seeking further comment were not answered.

Ho Chi Minh City's labour confederation said last month that many factories in the city had been forced to cut working hours, furlough staff or begin layoffs.

Growth in Vietnam's

factory activity

in October slowed for the second straight month to 50.6, a business survey showed this week, although official data showed footwear exports in the month rose 5% against September.

A representative for Taiwan's Pou Chen Corp, one of the world's biggest manufacturers of branded sports footwear, said its operations in Ho Chi Minh City were running normally. (Reporting by Phuong Nguyen Editing by Ed Davies)

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