A number of prominent factories in Penang, northern Malaysia have begun cutting their expenditures by temporarily shutting down their plants and letting their staff go for forced leave.
Unconfirmed sources indicated that Agilent Technologies, Flextronics, Jabil Circuit, AMD, Spansion and ASE Electronics are among those which are ready to shut their plants between November and December.
The fate of Dell’s employees, on the other hand is still in doubt after the company has been reported to be sourcing for potential buyers from the outsourcing market. Not far from Penang, rumour is fast spreading that Silterra, which operates its facilities in Kulim, Kedah may be forced to close its business due to disasterous losses in the last 3 years.
Recruitment and hiring are running at a snail’s pace, and some of the companies may have to resort to retrenching and shrinking their workforce size in order to survive.
The scenario looks like a repeat of the Asian financial crisis ten years ago, where many manufacturing companies in Penang closed their business in flock. Shutting down plant is one of the popular ways for manufacturing companies to reduce its cost of expenditure, but if this exercise fails to bring back the company on track to profitability, then the employees may be facing their worst nightmares as retrenchment may not be too far away.