Millions of garment workers could lose their jobs as global brands are demanding price cuts and delaying payments to suppliers who are desperate for orders to survive the new coronavirus pandemic, researchers said on Friday. Suppliers said they had already laid off 10 percent of their workers and would have to cut another 35 percent of their labour force if order reductions continued.
Suppliers have been asked to make their prices an average of 12 percent cheaper than last year, research by the Center for Global Workers’ Rights (CGWR) at Penn State University in the United States found, describing such practices as “leveraging desperation”.
“We are seeing a dramatic squeeze down of price, reduced orders and late payment,” said Mark Anner, author of the report and director of the CGWR. “This worries me for the wellbeing of the suppliers and the workers. This will affect the small and medium suppliers first.”
Fashion companies cancelled orders worth billions of dollars earlier this year as the coronavirus shuttered stores worldwide, leading to wage losses of up to $5.8bn, according to pressure group Clean Clothes Campaign.
More than half of the manufacturers surveyed said they would have to close down if the “sourcing squeeze” continued.
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