1 million textile workers to be hit amid the economic crisis in Pakistan

Due to their employment status, informal workers in the textile industry will not have access to any social welfare benefits or severance packages


Due to the current economic uncertainty prevailing in Pakistan, the industrial sector is heading towards a significant decrease in production and the possibility of further job losses. Reportedly, the National Trade Union Federation of Pakistan has stated that over one million informal workers in the textile industry are expected to be affected as a result.

According to an article in The News International, Nasir Mansoor, secretary general, National Trade Union Federation, Pakistan, stated that approximately one million informal workers, who are predominantly employed in the textile industry, are expected to be laid off. Due to their employment status, these workers will not have access to any social welfare benefits or severance packages, he added.

Mansoor described the current state of affairs as grim and explained that many companies resort to hiring employees through third-party contracts to provide various benefits to workers as per the labour laws. As a result, all workers are considered informal, and it becomes easier for companies to terminate their employment, as they do not have any legal recourse to take their grievances to court.

This also means that the current employees will be required to work longer hours to cover for the shortage of staff and rising operational expenses. Additionally, certain industries like automobile and investment, are presently implementing a temporary hiring freeze, and the situation is expected to improve once the country’s foreign exchange reserves increase.

The Pakistan Association of Automotive Parts and Accessories Manufacturers has reported that 25,000-30,000 workers in the automotive sector have lost their jobs due to a decrease in annual sales.

According to a management-level official connected with a Pakistan-based investment firm, sectors that depend heavily on imports, such as automobiles and automotive parts, are more likely to be impacted by economic uncertainty. He also remarked that the country’s banking sector has improved due to rising interest rates.

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