In the Ashulia industrial zone, 35 garment factories dismissed approximately 5,000 workers between January and May, marking the steepest losses in a widespread wave of layoffs across Bangladesh. The rapid contraction impacts thousands of livelihoods, threatening a critical national industry. Overall, at least 79 factories in Bangladesh laid off 7,784 workers in the five months through May 31, a direct result of a shortage of purchase orders, according to WWD.
Bangladesh's garment industry has been a consistent engine of economic growth, but it is now experiencing mass layoffs driven by external forces like declining international purchase orders. The tension exposes the inherent vulnerability of an export-dependent labor market.
Without a significant rebound in global consumer demand or robust government and industry support, the crisis in Bangladesh's garment sector is likely to deepen, leading to further job losses and prolonged economic instability.
Thousands of Workers Displaced Across Key Industrial Zones
- The Ashulia industrial zone recorded the most severe impact, with 35 factories dismissing about 5,000 workers between January and May, according to WWD.
- Al-Muslim Group laid off nearly 1,900 workers across its seven garment factories, citing a shortage of purchase orders, en.bd-pratidin.com reported.
- In Savar, 1,868 workers from seven garment factories under the Al-Muslim Group lost their jobs.
With nearly 89% of reported layoffs concentrated in Ashulia and Savar/Al-Muslim Group, the crisis is not a uniform industry-wide slowdown but a targeted shock. The concentration of layoffs risks localized economic collapse and social instability in these highly dependent regions.
Plummeting Global Demand Drives Order Shortages
Bangladesh's garment exports dropped 3.41 percent year-over-year from July to May of fiscal year 2025/26, according to WWD, reflecting a broader contraction in international demand. Apparel exports to the United States suffered a deeper setback during the first four months of the year, according to The Financial Express.
The significant drop in exports to key markets like the United States directly translates into fewer purchase orders, forcing factories to reduce their workforce. The trend marks a critical inflection point: the industry's long-standing reliance on low-cost labor and high-volume orders is proving unsustainable against volatile global demand.
Beyond Orders: Broader Challenges Emerge
While declining global purchase orders are the stated cause for most layoffs, other factors contribute. In Gazipur, 560 workers from 19 factories were laid off between May 17 and June 7, citing low work orders, excess manpower, labor disputes, and violations of factory regulations, according to en.bd-pratidin.com.
The inclusion of 'violations of factory regulations' in Gazipur's layoff reasons suggests some factory owners may be leveraging the economic downturn to address or even exploit pre-existing internal issues, complicating the narrative of a purely external crisis. While order shortages are primary, factors like excess manpower and labor disputes exacerbate the crisis, revealing deeper structural challenges within the industry.
Industry Leaders Convene Amidst Uncertainty
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) held an emergency board meeting to address a persistent decline in garment exports, WWD reported. The meeting confirms the severity and speed of the global demand shock impacting the industry.
The BGMEA's urgent meeting acknowledges the severe, persistent decline and the need for collective action. The industry now faces an urgent demand for diversification or a fundamental re-evaluation of its operational model.
Without a significant shift in global consumer patterns or a proactive overhaul of its operational model, Bangladesh's garment industry appears poised for continued instability and further job losses.
