Beximco lays off 30,000 workers for lack of orders, banking support

Beximco Group has laid off 30,000 workers from its 16 apparel factories in Gazipur Industrial Park, citing a lack of orders and banking support following the ouster of Sheikh Hasina's government in August.

The layoffs represent 75% of the company's workforce at the industrial park, leaving 10,000 workers in Beximco Limited's Textile and PPE divisions.

"Thirty thousand workers were laid off today. As per regulations, they will receive half of their basic salary and allowances for 45 days. The wages for all 40,000 workers at the industrial park for November have been paid," Osman Kaiser Chowdhury, a director of Beximco Group and managing director of Beximco Limited, told TBS today (17 December).

Osman added that Beximco is trying to continue paying the textile workers through local outsourcing, while Beximco PPE, which exports approximately $1 million worth of products each month, is attempting to keep production going at a factory outside the industrial park.

Over the past four months, the group spent Tk300 crore, largely on worker wages, including Tk100 crore financed through bank loans. The group requires Tk60 crore per month to pay wages, with an additional Tk15 crore needed to address unpaid staff for four months.

"We are generating Tk5-6 crore in monthly revenue from subcontracting with other factories, which is far from sufficient. Previously, these factories earned $25-30 million per month [Tk250-300 crore]," Osman told TBS on Monday.

The lack of new orders since August has worsened Beximco's financial troubles. Major global buyers have expressed interest in resuming business, but Beximco's inability to secure Letters of Credit (LCs) from banks has hampered these efforts.

"Some banks could open LCs, but only with a 100% margin and positive signals from the government. We don't have the necessary cash reserves to meet such terms," Osman said, warning that permanent factory closures might follow the layoffs.

Beximco's financial woes are tied to its mounting debt. A recent report from Bangladesh Bank revealed that the group's loans exceeded Tk50,000 crore as of 30 November 2024, with over 50% – Tk25,524 crore – classified as defaulted. 

The group owes 16 banks and seven financial institutions, with 78 of its 188 companies involved in borrowing.

The crisis has broader political implications. Salman F Rahman, Beximco's vice-chairman and former adviser to ousted prime minister Sheikh Hasina on private industry, has faced criticism for allegedly using his influence to secure favourable terms for Beximco, including extensive loans.

Salman was arrested in August and is currently in jail.