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After twenty years of operation with almost 700 employees, 8 Star Sportswear Ltd will completely shut down in January 2027 as a result of a scarcity of orders which has triggered older staff to fret about their probabilities of securing new employment.
In line with a Fb publish on Thursday by the Federation of Free Commerce Union of Staff of the Kingdom of Cambodia (FTUWKC), the manufacturing facility has agreed to pay employees all advantages required below the Labor Regulation. Throughout the closure discover interval, staff may also be entitled to 2 paid days off per week to hunt new jobs.
Oun Channy, 53, a employee consultant who has labored on the manufacturing facility for almost 20 years, informed CamboJA Information that employees are glad with the advantages that the manufacturing facility is offering and the advance discover given. A few of them have already began in search of new jobs, however employees aged 50 and above face difficulties discovering employment, she stated.
Since early October, working hours have been decreased to 4 days per week, ending at 4 p.m., in contrast with earlier time beyond regulation shifts lasting till 7 p.m.
She stated Ministry of Labor officers visited the manufacturing facility to elucidate the closure course of and provided to assist older employees discover jobs, however she was uncertain learn how to entry that help. She estimated that 20% of the workforce consisted of employees in that age vary.
Heng Sophy, a manufacturing facility administrator, declined to remark and referred inquiries to the ministry, saying the closing was finished in accordance with the legislation.
Ministry spokesperson Solar Mesa informed CamboJA Information that world and regional challenges, together with the oil disaster, localized conflicts, operational disruptions and Cambodia-Thailand border tensions, has pressured a number of factories to shut.
Nevertheless, he maintained that Cambodia’s garment sector remained sturdy. Within the first 9 months of 2026, almost 50,000 factories, and Small and Medium Enterprise (SME) had been working, with greater than 2.3 million employees employed, together with almost 3,000 garment and textile factories using over 1.3 million folks.
“That is progress displaying that Cambodia’s garment sector stays wholesome, continues to offer advantages and earnings, and offering employment alternatives for tens of millions of our residents,” he stated.
Mesa burdened that factories should pay employees all legally required advantages upon closure, with some providing greater than the legislation requires. He stated there are mechanisms to assist displaced employees discover employment, with almost 90,000 vacancies obtainable throughout factories and enterprises in Phnom Penh and the provinces.
Say Sokny, Unbiased Labor Specialist, acknowledged that older employees would probably battle to search out jobs after the manufacturing facility closure, whereas youthful, skilled garment employees have higher alternatives as extra Chinese language and Vietnamese producers transfer operations to Cambodia as China faces excessive tax and Vietnamese employees transfer on to heavy business jobs with excessive salaries.
“This $2 wage enhance [this year] is a chance for factories to make vital earnings due to low cost labor in Cambodia,” she stated, noting that Cambodia additionally advantages from preferential commerce preparations, together with the offers through the Regional Complete Financial Partnership (RCEP).
“Subsequently, we all know from following the scenario that these employees are capable of finding jobs instantly as a result of they have already got expertise in garment.”
Sokny stated the manufacturing facility had confronted declining orders because the COVID-19 pandemic however questioned whether or not the closure was solely as a result of a scarcity of orders. She opined that working circumstances, union rights or an growing older workforce might have influenced worldwide consumers’ choices, though she offered no proof linking these elements to the closure.
She famous that this manufacturing facility had lengthy provided UK retailer Primark and benefited from duty-free entry to the British market. She additionally instructed that some manufacturing facility house owners would possibly shut older amenities and set up new ones to qualify for presidency tax incentives.
“Why didn’t they’ve buy orders? Maybe the model’s house nation thought of not putting extra orders as a result of the manufacturing facility could have had irregular or substandard working circumstances.”
Khun Tharo, program supervisor at labor rights group CENTRAL, informed CamboJA Information that they documented no less than 5 manufacturing facility closures within the first 10 months of 2026, akin to Excessive Tech Garment Attire, ML Intimate Attire Cambodia, NIDEC Die-casting, Sahakreas Create Bridge Firm and eight Star Sportswear Ltd. In whole, it affected round 4,800 employees.
Nevertheless, he added some have discovered new jobs, others stay unemployed, elevating issues about rising instability within the labor market.
“The ensuing lack of earnings and employment safety threatens employees’ livelihoods, heightens their vulnerability to financial shocks, and will increase the chance of indebtedness, significantly for low-income households already battling rising dwelling prices,” he stated.
Tharo warned that the closures weren’t merely remoted enterprise choices however mirrored broader financial pressures and structural challenges dealing with Cambodia’s export-oriented manufacturing sector.
“With out well timed intervention, the burden will fall disproportionately on employees and their households and Cambodia’s long-term financial resilience,” he stated.
He added that continued closures might sign declining investor confidence and lift issues about Cambodia’s competitiveness because the nation prepares to graduate from least developed nation standing.
