An analysis of data from the Industrial Police, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) shows that at least 20,000 workers lost their jobs through layoffs or retrenchment during the first six months of this year. Most of them were employed in the ready-made garment (RMG) sector.
Garment manufacturers say layoffs are increasing because of a decline in export orders, while new recruitment has virtually stopped. They also blame financial difficulties caused by limited access to bank financing, which they say is forcing factories to close. Unless order volumes increase, they expect little change in the situation.
On the other hand, labour leaders say they do not believe purchase orders have declined significantly. Ready-made garment exports in the outgoing fiscal year fell only marginally. They argue that, in addition to factory closures and reduced orders, many workers are being laid off for taking initiatives to form trade unions.
According to the Export Promotion Bureau (EPB), Bangladesh exported garments worth US$39.35 billion in fiscal year 2024–25, recording 8.84 per cent growth. During the first 11 months (July–May) of the just-ended fiscal year, garment exports totalled US$35.31 billion, down 3.41 per cent from the same period a year earlier.
Industrial Police data show that 79 factories across eight industrial zones laid off 7,784 workers during the first five months of this year. Of those factories, 35 were located in Savar-Ashulia, 33 in Gazipur, five in Chattogram, three in Narayanganj, two in Khulna and one in Mymensingh. Most belonged to the garment sector.
The highest number of layoffs occurred in March and May, when 30 and 29 factories, respectively, dismissed workers. The two months coincided with the Eid-ul-Fitr and Eid-ul-Azha holidays. Following Eid-ul-Azha, Al-Muslim Group laid off 1,868 workers from its three factories in Savar.
According to BGMEA, 80 member factories dismissed or retrenched 19,188 workers during the first six months of the year. These included 18 factories in Dhaka, 22 in Savar-Ashulia and 40 in Gazipur. Of the 80 factories, 27 have since shut down, while the rest remain operational.
Industrial Police data show that 44 factories in Gazipur laid off 2,155 workers between January and June. Among them, seven factories dismissed 556 workers because of declining export orders and financial difficulties. These factories include APS Apparels, Evince Textile, National Polymer, SEG Fashion and Bellissima Apparels. APS Apparels dismissed 179 workers, while Evince Textile laid off 180. The remaining 1,599 workers were dismissed by 37 factories for reasons including labour unrest, halting production, alleged misconduct and document forgery, according to factory owners.
The former interim government promulgated the Labour (Amendment) Ordinance, 2025, in November last year. Under the revised law, workers can now form a trade union with the consent of at least 20 employees at a factory or establishment. Previously, support from 20 per cent of the total workforce was required. The ordinance has since been enacted into law.
Several garment manufacturers said the imposition of reciprocal tariffs by US President Donald Trump on imports from various countries last year had hurt Bangladesh’s exports to its largest apparel market, the United States. They also cited intensifying competition in Europe and disruptions caused by the Iran conflict as factors contributing to weaker exports, more factory closures and rising layoffs.
BGMEA President Mahmud Hasan Khan said factories were closing for a variety of reasons, including fewer export orders, banking problems and owners exiting the business. At the same time, new factories are also being established, which is why overall exports have not fallen significantly, he said. Responding to another question, he added that the number of workers laid off in the first six months of the year was likely higher than 19,000, as some factories had not reported their layoffs to the association.
BKMEA President Mohammad Hatem said many factories were facing a shortage of purchase orders, forcing a handful of factories to shut down every month, while others were laying off workers. Besides the shortage of orders, another major reason behind factory closures is that businesses are not receiving the necessary support from banks because of their stringent lending policies,” he said.
Labour organisations, however, allege that workers are being dismissed unlawfully in many cases. Babul Akhter, general secretary of the Bangladesh Garments and Industrial Workers Federation, said the government had created an incentive fund to help reopen closed factories. Some owners may even shut down operational factories to qualify for that assistance, he said. The government should investigate why factories are closing and whether laid-off workers are receiving the compensation they are legally entitled to.
