The Vietnamese state news agency says that companies have been forced to implement massive redundancies as a result of the economic crisic in South East Asia.
The agency says that the Ministry of Industry which is the country's largest state employer, has laid off more than 15% of its workforce.
Our South East Asia reporter, Enver Solomon says the regional crisis has meant Vietnamese companies have lost their competitive advantage which has forced them to cut thousands of jobs:
The fall-out from South East Asia's economic crisis has come late to Vietnam.
With no convertible currency or Stock Market, the Communist country initially remained an island of relative calm amongst the turmoil on the region's markets. But this couldn't last forever and earlier this year, the economy began to falter.
It is the devaluation of many of South East Asia's currencies which has done the damage. This has severely weakened the competitiveness of Vietnam's exports.
In the early 90s, manufacturing industries such as shoes and textiles boomed. Low production costs meant the products could be produced more cheaply than in other Asian countries.
Exports expanded and the economy prospered. But having lost their competitive edge, many companies have now been forced to lay off thousands of workers.
The situation is particularly bad in the country's state-owned enterprises - most of them are in deep trouble with huge debts. The World Bank has warned that far-reaching reforms are urgently needed to make them more efficient.
So far, Vietnam's leaders have been slow to act. Factional divisions have prevented them from taking a clear stand.
Many senior figures in the Communist Party are concerned that further liberalisation will weaken their political control.
For now their caution is holding sway and the party is shying away from making any bold economic reforms.
The downward spiral of the Asian tigers
(31 Mar 98 | Special Report)
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