A garment company has cut 1,300 employees and is now issuing shares to... pay salaries.

Thanh Tri Garment used to be a business with thousands of employees - Photo: TTG

The Board of Directors of Thanh Tri Garment Joint Stock Company (TTG) has just reported to the State Securities Commission on changing the plan to use capital from the private share offering in 2024.

Issuing shares to... pay salaries, insurance debts

Last August, the company successfully offered 14 million shares at VND10,000 per share, raising VND140 billion.

According to the initial plan, this amount will be allocated to 4 main purposes: paying social insurance debt (3.4 billion VND); paying salaries to employees in the third quarter of 2024 (4.3 billion VND); upgrading factories (4 billion VND); paying 1-year rental costs (2.3 billion VND).

The entire initial capital utilization plan is expected to be implemented in the third quarter of 2024.

In the progress report sent to shareholders, TTG said that by February 13, 2025, 9.3 billion VND out of a total of 14 billion VND had been used.

Up to now, the company has agreed to adjust the capital usage plan with many changes.

Under the new plan, the money expected to be used to upgrade the factory will also be used to pay salaries. The rental fee will remain at VND2.3 billion, but the payment date will be delayed.

Mr. Ly Nam Ninh - General Director of Thanh Tri Garment, said: "Because we could not agree on changing the product types and adjusting the contract price (as requested by the supplier), the company could not upgrade the factory as planned."

Reduce capital contribution ratio to reserve Tet bonus for workers

It is not until now that Thanh Tri Garment has faced pressure on cash flow. In early 2025, Mr. Dang Anh Tuan - Chairman of the Board of Directors - reported receiving a proposal from the Board of Directors requesting to reduce the capital contribution ratio from 60% to 49% at the subsidiary - Thanh Tri TTG Garment Joint Stock Company.

The reason is that the parent company is facing financial difficulties and needs to keep resources to pay Tet bonuses to employees. Up to now, Thanh Tri Garment has not yet completed the capital contribution as initially committed (5.94 billion VND).

Therefore, the Board of Directors proposed to reduce the ownership ratio in the subsidiary to 49% to comply with legal regulations on capital contribution in joint stock companies, and to avoid violating the commitment.

Thanh Tri Garment was equitized from Thanh Tri Export Garment Enterprise - formerly belonging to Hanoi General Production - Import - Export Company.

According to the company's website, in 2002, the factory expanded its sewing workshop No. 3, specializing in knitwear production, attracting 400 more workers, bringing the total number of employees to 1,480.

However, by the end of 2024, the number of employees will be only 147, a decrease of 41 people compared to 2023 and a decrease of 1,333 people compared to 2002 - the time before equitization.

	Column 1
1997	1054
Year 2002	1480
Year 2008	1099
Year 2009	609
2021	231
2022	206
2023	188
2024	147

Data: Financial statements

Last year, although business recorded slight growth, it did not meet the set target. Specifically, according to the financial report, TTG's revenue in 2024 reached 37 billion VND, an increase of nearly 16% compared to the previous year. Profit after tax reached 2.16 billion VND, an increase of 19%.

Thanh Tri Garment Company says it is difficult to recruit new employees and retain skilled personnel.

The company's board of directors assessed that 2024 would continue to be affected by the Russia-Ukraine conflict, causing difficulties for the world economy , thereby affecting production and business.

Export orders decreased in both quantity and unit price, input costs increased (external tax services, insurance, etc.), while it was difficult to retain skilled young workers, and not enough new people were recruited to compensate for the shortage of staff.

The company said it needed to focus on finding orders at better prices while tightening costs, especially labor costs. As a result, many important targets in 2024 did not meet the set plan.

TTG had set a target of 170 employees, 60 billion VND in revenue, and 6 billion VND in profit by 2024. However, the targets were not met. The positive point is that the average income of employees increased by 8.5% compared to the plan.

Entering 2025, TTG set quite ambitious goals: revenue of 60 billion VND, profit after tax of 12 billion VND - double that of the previous year.

BINH KHANH

Source: https://tuoitre.vn/mot-cong-ty-may-giam-1-300-nhan-su-nay-phat-hanh-co-phieu-de-tra-luong-20250520123456975.htm