A total of 5,007 workers in the Philippine wearable industry were laid off as collateral damage from ongoing global trade challenges.

Confederation of Wearable Exporters of the Philippines president Maritess Agoncillo said at least 4,577 workers have been retrenched, while 500 were forced to leave their jobs.

For instance, about 2,000 workers have been laid off by L&T International Group Philippines Incorporated.

In a statement on Monday, L&T Clark said even if the company has always prioritized ethical production and the welfare of its team, the recent application of the Uyghur Forced Labor Prevention Act (UFLPA) by the United States Customs and Border Protection (CBP) has posed unforeseeable difficulties for their operations.

Prolonged delays in clearing shipments

“Despite our strict adherence to UFLPA-compliant sourcing practices, we are currently being required by the CBP to prove the origin and production practices of all elements of our supply chains, which has led to prolonged delays in clearing recent US shipments, causing significant business interruption and order losses,” the statement, coursed through the CONWEP, stated.

Further, the company stressed that such developments have directly impacted its workforce, necessitating the implementation of forced leave for many employees in the previous months.

“Given the extended and unanticipated time period for determinations on our shipments by CBP, it has become unsustainable to maintain full capacity without causing undue hardship to our employees. As a result, L&T Clark was compelled to implement a retrenchment program. This challenging decision is made with our employees' well-being in mind, to spare them from uncertainty and prolonged forced leave,” the statement further read.

The company said on 26 April 2024, they have announced a retrenchment program affecting approximately 2,000 employees.

Such action was coordinated with the Department of Labor and Employment to ensure transparency, fairness, and adherence to legal standards, underlining our dedication to ethical business practices.

“All affected employees received comprehensive severance packages that meet legal standards. The retrenchment was executed smoothly and peacefully. Further, we are open to address any future clarification that the retrenched employees may file before the labor office,” according to the company.

Looking to the future, the company said it is hopeful for a rebound in business. Once conditions improve and orders resume, the company said the goal is to rehire its skilled workforce and restore normal operations.

External policies

“It is crucial to recognize that these circumstances are the result of external policies beyond our control. Nonetheless, we are committed to handling this transition with the greatest respect, integrity and transparency, maintaining our pledge to our employees and stakeholders,” the L&T Clark maintained in its statement.

L&T Clark is a wide-ranging global enterprise with more than 50 years of success in consumer goods supply chain and in global fashion in Asia, America and Europe.

At a local forefront, L&T Clark Philippines has manufacturing facilities in Clark, Pampanga as well as in Cebu, Tarlac and Bataan which are established partners of international and well-known brands such as Ralph Lauren, Dillard's, Adidas, Uniqlo, Victoria's Secret, Coach and Michael Kors, among others.