At least 2,700 workers, including unionists, at a garment and shoe factory in Kampong Cham province will lose their jobs in December after the company cited falling orders from U.S. buyers.
As questions mount over whether new American tariffs are a factor, workers fear the fallout in Cambodia’s fragile job market. Civil society groups are reviewing the case to ensure labor rights are upheld, after tensions with the firm earlier this year when hundreds of workers went on strike, alleging colleagues were dismissed without proper notice.
The Taiwanese-owned LECROWN Shoes Industry, a supplier to major U.S. brands including Vans, The North Face and Dickies, is undergoing a staggered rollback of operations and plans to terminate around 2,700 contracts by December 10, according to a notice dated Oct. 8 shared with CamboJA News by an employee.
The notice states that wages, including seniority pay, and benefits will remain in place until termination. Laid-off workers were told they would receive seven days’ severance, their final salary, and eight days’ wages, in line with Cambodian labor law, according to an employee who spoke on condition of anonymity due to sensitivities around discussing their employer.
Previously more than 800 workers said they were unfairly terminated by LECROWN – which the company denies – after it first announced plans in July to dismiss roughly one-tenth of its 10,000 staff due to reduced orders.
But for affected employees such as Chamnan*, she believes the “no orders” claim is a pretext to dismiss long-serving staff and later rehire new employees.
“I am worried about discrimination against older workers,” she said, adding that the factory now employs about 5,000 people and that she could be among the next to be terminated after 12 years.
Other veteran employees have not had the same fate.
After 10 years at the factory, Han* is among the roughly 2,700 employees set to lose their jobs by the end of the year.
“I have worked here for a long time, and I don’t regret it, but I do not know what to do,” he said, highlighting that assurances about severance pay offered little comfort.
The outlook for Cambodia’s garment, footwear and travel goods (GFT) sector remains slightly uncertain but stable. The country faced U.S. tariffs of 49% and 36% during the onset of Donald Trump’s trade war, which were ultimately cut to a regionally competitive rate of 19%. GFT exports have since rebounded, but the World Bank warned that next year could be tougher, with fewer orders expected.
For workers such as Han, the instability of Cambodia’s job market adds to the risk. Hundreds of thousands of migrant workers are returning from Thailand following a deadly border conflict, and with more than 88% of employment in the country informal and without benefits, securing a new GFT job is also precarious.
The market conditions and downgraded economic outlook have heightened anxieties, though the Labor Ministry claims Le Crown’s calculated severance is in line with law.
“The procedures at the Le Crown factory were carried out in accordance with the law and discussed with all relevant parties,” asserted Labor Ministry spokesperson Sun Mesa.
But local labor rights groups Central said further investigation is needed.
The group’s program manager, Khun Tharo, said they are verifying claims that reduced orders from Le Crown’s main client, VF, which represents several major American apparel brands, prompted the layoffs.
Ashley McCormack, director of corporate communications for VF, did not immediately respond to a request for comment.
Central is also calling for the termination notices of what they believe may be 49 union leaders and activists to be recalled.
“Currently, we are in contact with the buyer company. Separately, we are investigating the company planning to close the factory because we do not yet have official information on the reason for the stoppage of orders from the Le Crown factory,” Tharo said.
(Additional reporting by Lon Saoda)
