The Beximco Group has announced the layoff of nearly 40,000 workers across its 15 apparel units, attributing the decision to a significant drop in work orders for its export-oriented garment and textile factories located in Gazipur, near Dhaka.
Notifications issued on 15th December informed all employees that layoffs would take effect starting 16th December, with production activities suspended until a tentative reopening date of 30th January 2025. The company’s notifications outlined that laid-off workers would not be required to report to the factories during this period. According to the Labour Law, they will receive half of their basic salary along with other benefits during the 45-day layoff.
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Osman Kaiser Chowdhury, director of Beximco Group’s Finance and Corporate Affairs Division, explained that the layoffs were necessary as the company could not open new letters of credit (LC) for importing raw materials. The affected factories include well-known names such as Shinepukur Garments, Urban Fashions, Beximco Fashions, and Crescent Fashion and Design, among others.
Chowdhury noted that Beximco had managed to pay its workers full wages until November, thanks to government liquidity support. However, the recent political turmoil following the ouster of the Awami League government in August has severely impacted the conglomerate. Its Vice Chairman, Salman F Rahman, remains in custody amid allegations of leveraging political influence for personal gain, which has led to the exposure of financial irregularities within the company.
As of November, Beximco Group had accumulated nearly Taka 50,000 crore in bank loans, with over half of that amount in default. The company reported a loss of Taka 36 crore in FY ’24, a sharp decline from the Taka 710 crore profit of the previous year. Amidst severe liquidity issues, the Bangladesh central bank appointed a receiver to oversee the conglomerate’s operations.
Janata Bank has been providing financial support to cover worker payments, which amount to approximately Taka 60 crore per month, a situation expected to continue until January, according to AHM Shafiquzzaman, secretary of the Ministry of Labour and Employment.
Shafiquzzaman mentioned that the decision to lay off workers was made during an Advisory Council meeting, emphasising the Government’s inability to provide indefinite financial support to Beximco due to its enormous financial demands. However, other units of Beximco, such as pharmaceuticals and ceramics, will continue to operate.
Md Ruhul Amin, the Bangladesh Bank-appointed receiver for Beximco Group, expressed cautious optimism about the potential reopening of the factories, noting that management is seeking funding from banks. Nevertheless, Babul Akhter, General Secretary of the Bangladesh Garment and Industrial Workers Federation, voiced skepticism about the likelihood of resuming operations, citing concerns that global brands and domestic buyers may withdraw their orders in light of recent developments.
Akhter suggested that Beximco should consider terminating workers only after settling all outstanding dues and benefits, and he urged the company to reach out to global brands for assistance in providing labor rehabilitation support.
