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19 Mär 2020

Rachel Cernansky, Vogue Business

Garment workers face layoffs as brands cancel or postpone orders indefinitely, including those scheduled to be shipped

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"As coronavirus spreads, supply chain workers face layoffs", 19 March 2020

... [D]enim factory owner [Mostafiz Uddin] in Bangladesh... learned that a handful of brands were putting their orders on hold..[A]fter a number of governments in the US and Europe ordered businesses to close their doors — things got worse. Emails from more brands flooded in... “Don’t ship the goods. That’s the thing we are hearing from everybody,”...

It’s standard practice for brands not to pay for products until after they’re shipped. When an order is put on hold or cancelled, payments are also held or cancelled. That leaves suppliers on the hook for both their workers’ salaries and, because they buy their materials outright, for what they owe their own suppliers. Without revenue coming in or much cushion in their budgets, factory owners... may be forced to cut jobs. The pandemic has already prompted tens of thousands of layoffs and job suspensions, but millions more could be at risk... with little access to healthcare and no social safety net...

To assuage effects on manufacturing partners, brands could uphold contracts and buy the products they already committed to buying, and pay on time for them...

[P]resident of the Bangladesh Garment Manufacturers and Exporters Association, says that over three hours on Tuesday, $10 million in orders were cancelled across 20 factories. “Most brands are putting the orders indefinitely on hold and cancelling. They are also cancelling orders that are scheduled to be shipped now. For them it’s a question of the survival of the businesses, for us it’s the survival of our 4.1 million workers"...