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Beximco lays off 40,000 workers at 15 apparel units
REFAYET ULLAH MIRDHA and SUKANTA HALDER
The Beximco Group has laid off nearly 40,000 workers across its 15 apparel units, citing a lack of work orders for its export-oriented garment and textile factories in Dhaka’s outskirts of Gazipur.
Company notifications issued on December 15 informed all officials, employees and workers that the factories would enforce layoffs from December 16.
The notices said that laid-off workers were not required to report to the factories as all production activities would be suspended until a tentative reopening date of January 30, 2025.
Regarding employee salaries during the 45-day layoff period, the notifications referenced the Labour Law, which stipulates half of the basic payment for workers and some other benefits.
“The factories cannot continue operations as we are unable to open new letters of credit (LC) for raw material imports,” said Osman Kaiser Chowdhury, director of Beximco Group’s Finance and Corporate Affairs Division.
The affected factories include Shinepukur Garments, Urban Fashions, Yellow Apparels, Prefix Fashions, RR Washing, Beximco Fashions, Bextex Garments, New Dacca Industries, Int’l Knitwear & Apparels, Esses Fashions, Escorp Apparels, Crescent Fashion and Design and Crescent Accessories Limited.
According to Chowdhury, laid-off workers received their full wages through November, thanks to government liquidity support.
Beximco employs a total of 70,000 workers, making the layoff of over 40,000 workers equivalent to more than 57 percent of its workforce.
Chowdhury told The Daily Star yesterday that the Ministry of Labour and Employment advised them to lay off workers as the government could not continue providing indefinite cash aid, and Beximco was also unable to sustain its payroll.
Following the ouster of the Awami League government in early August, the conglomerate landed in hot water. Its Vice Chairman Salman F Rahman, who remains behind bars, was an influential adviser to deposed prime minister Sheikh Hasina.
Rahman is accused of leveraging his political influence for personal business gain.
After the political changeover, a series of financial irregularities involving Rahman and his business empire came to light.
Recent data from the central bank showed that the Beximco Group owed nearly Tk 50,000 crore in bank loans as of November this year, with more than half of this staggering amount becoming default.
According to its financial disclosure, Beximco Ltd reported a loss of Tk 36 crore in FY24, a huge decline from the Tk 710 crore profit recorded in the previous year.
Amid a severe liquidity crunch, plummeting work orders and labour unrest over unpaid wages following the political changeover, the central bank in November appointed a receiver to manage the industrial conglomerate.
Since then, Janata Bank has been providing financial support to the group to cover worker payments, which amount to around Tk 60 crore per month. This liquidity support would continue until January next year, according to AHM Shafiquzzaman, secretary of the Ministry of Labour and Employment.
Shafiquzzaman said the decision to lay off workers at the apparel units was made at an Advisory Council meeting at the secretariat last Thursday.
He said the government cannot indefinitely fund Beximco’s textile and garment units due to their massive financial needs.
The authorities have clarified that other Beximco units such as pharmaceuticals and ceramics will continue operations until further notice.
“As the apparel factories have no work orders, they have opted for layoffs,” said Md Ruhul Amin, the Bangladesh Bank-appointed receiver for Beximco Group. “This situation may persist until funds can be mobilised to resume operations.”
Amin expressed optimism about the possibility of the factory reopening soon, saying that Beximco’s top management is trying to secure funding from banks to restart operations.
However, Babul Akhter, General Secretary of the Bangladesh Garment and Industrial Workers Federation, expressed scepticism about the likelihood of the factory reopening.