Mobile World Investment Corporation (MWG) said it never has planned to lay off employees and its employee turnover happened spontaneously.

In the first quarter financial statement, MWG reported total employees of over 68,000 as of the end of March.

Local media, thereby, said that the retailer had cut 5,202 jobs compared to the beginning of the year. In the fourth quarter of 2022, its employees shrank about 4 per cent over the previous quarter to 73,202. This means, in the past half year, the company laid off a total 12,000 positions, according to reports from the media.

The staff turnover of about 9,000 in six months is completely normal for a business in the industry, the retailer explained.

In previous years, the number of workers quitting was offset by new-hired workers. However, due to the slowdown of the economy and the drop in purchasing power from the end of 2022 to the beginning of 2023, MWG temporarily halted new recruitment activities. In the meantime, the company also has to realign personnel based on actual revenue.

In addition, the company attributed the difference of 12,000 employees to a change in the calculation of the number of employees in the financial statements.

The method used to calculate the number of employees has changed in the report dated March 31, 2023. The number of reported workers reflects the precise and valid number at the time of reporting. This calculation yields a total of 68,048 individuals.

In the first quarter, MWG's net revenue was over VND27.1 trillion (US$1.2 billion), down 28 per cent year-on-year. Despite a 19 per cent decrease in selling and administrative costs, its profit after taxes fell by about 99 per cent to over VND21 billion. This is the worst result since the retailer listed on the stock exchange.

The outcome directly results from the decline in consumer confidence of high-end customers toward expensive goods. Customers with modest incomes also find it more difficult to get consumer loans through installment purchase methods. — VNS