More than 3,000 garment workers in Yangon are set to lose their jobs after Chinese-owned manufacturer Teng Hui Myanmar announced the closure of its operations in Hlaing Tharyar Township at the end of September.

The company, which has operated in Myanmar for 13 years and runs five factories in the township, said falling orders from Swedish fashion retailer H&M had prompted the decision. H&M began phasing Myanmar out of its supply chain in 2023 amid concerns over labor rights and conditions under military rule.

According to The Irrawaddy, workers were informed of the closure and compensation arrangements on Wednesday, with management advising employees to seek new jobs. Many of the workers, most of them women, are now facing uncertainty over their livelihoods, particularly as employment opportunities in Myanmar’s struggling garment sector remain limited.

The closures are likely to deepen unemployment and economic hardship among factory workers and their families. With garment workers earning around 10,000 kyats, or less than US$3, a day, losing a job could quickly affect household income, food security and access to basic services. Workers with years of experience may also struggle to find new employment as factories continue to reduce operations.

Myanmar’s garment industry has been hit by political instability, labor shortages, rising production costs and frequent power outages since the 2021 military coup. The pressure from international brands to withdraw from Myanmar over labor abuses has further reduced orders for some factories, creating a difficult dilemma: continued international business supports jobs, while withdrawal is intended to pressure authorities over workers’ rights.

Under Myanmar labor law, workers are generally entitled to 30 days’ notice and compensation based on their length of service. For thousands of Teng Hui employees, however, the immediate concern is finding new work in an industry already facing shrinking opportunities.

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