It is alarming that industrial layoffs in the country have become increasingly common, with workers being dismissed every now and then, especially in the ready-made garment (RMG) sector. This continuing retrenchment may not only lead to serious industrial unrest but also have far-reaching implications for the national economy by reducing investment, employment and export earnings.
The country's industrial belt has already witnessed workers' protests in several areas following massive layoffs at industrial units. Many workers, after returning from their Eid-ul-Azha holidays at the end of May, suddenly discovered that they had been laid off without any explanation from their employers.
As a result, according to estimates, more than 10,000 workers have reportedly lost their jobs within a month, while over 400,000 have become unemployed during the past two years as more than 500 factories ceased operations.
This has left many families struggling to cope with the sudden loss of income and growing uncertainty about the future. Consequently, many workers have taken to the streets in protest.
What are the main reasons that have forced factory owners to shut down their businesses? The foremost factors cited by manufacturers are prolonged gas shortages, frequent electricity outages and higher fuel prices. Additionally, weak export demand, geopolitical uncertainties, rising production costs and tighter financial conditions have undoubtedly placed immense pressure on them.
Consequently, many factories are operating at only 40 to 50 percent of their production capacity because of inadequate gas pressure and frequent power disruptions. Their forced reliance on costly diesel generators has sharply increased production costs, making Bangladeshi manufacturers less competitive in international markets.
As they lose competitiveness in global markets, industrialists, particularly those in the RMG sector, have been compelled to shut down hundreds of factories, weakening investor confidence, reducing employment opportunities and slowing industrial growth. Merchandise exports have already declined, while industrial expansion has lost momentum. If this trend continues, the country's export-driven economy could face even greater headwinds, particularly since the RMG sector remains Bangladesh's largest source of foreign exchange earnings and employment.
The growing labour unrest in major industrial belts such as Savar, Ashulia, Gazipur, Narayanganj and Chattogram signals the potential for wider unrest across the country. Workers who return from Eid holidays only to find that their factories have shut down naturally feel betrayed and frustrated. While factory owners insist that legal procedures are being followed during retrenchments, allegations of unpaid wages and inadequate compensation continue to surface.
However, factory owners are not solely to blame for these retrenchments. Many businesses themselves are struggling to survive because of the current economic situation and the prolonged global crisis.
The government must therefore adopt a comprehensive response. Resolving the energy crisis should receive the highest priority through improved fuel supplies, infrastructure upgrades and more efficient energy management.
