Skip to main content

Nike Supplier and Footwear Powerhouse Furloughs 2,600: Report

A footwear supplier to the likes of Nike, Adidas and Puma has reportedly furloughed at least 2,600 workers amid ongoing coronavirus disruption, driving up unemployment rates in Taiwan.

According to Taiwan’s Central News Agency (CNA), Pou Chen Corp. is a likely contributor to the 28,000 new furloughs reported for the week ending June 7.

Local news reports indicate that Pou Chen in May announced plans to furlough 2,600 employees at its Changhua, Taiwan factory from June through the end of the year, as consumers worldwide rein in spending on discretionary items like sport-ready shoes.

In April, Pou Chen briefly suspended operations at a Vietnam factory after local authorities discovered the manufacturer had violated social-distancing policies, which the company quickly remediated. Media reports have suggested Pou Chen’s revenue suffered as much as a 50 percent impact due to the virus, according to the CNA, although the company refused to comment.

Pou Chen employs approximately 350,000 people worldwide and makes footwear for Asics, Reebok, and Timberland with a footprint in China, Vietnam, Indonesia and Mexico. The company says it can produce more than 300 million pairs of shoes annually, accounting for roughly 20 percent of the market.

In a previous statement, Pou Chen said it would ask workers to take six days of unpaid leave each month pending approval of the workers’ union, a policy that would be effective through the end of the year.

Pou Chen reported consolidated sales from January through May tumbled 23.4 percent from the year-ago period to about $3.4 billion. Monthly numbers for May, meanwhile, plunged 27.5 percent versus 2019.