From December 16, Beximco's 16 garment factories will lay off about 40,000 workers.
Legally, layoffs are the company's only option right now.
Beximco, Bangladesh's largest textile and garment manufacturer, has laid off tens of thousands of workers.
The company continues to collapse after its co-founder and vice chairman was arrested in August on suspicion of criminal wrongdoing, and its future is uncertain.
The vice chairman was first arrested in connection with the death of a shopkeeper and later charged with money laundering, embezzlement and other financial matters.
Laying off 40,000 garment workers
According to an advisory committee set up by the government:
From December 16, 16 garment factories owned by Beximco, including the Besximco Fashion company, Crescent Fashion and Design, will lay off about 40,000 workers.
These workers will receive half of their basic salary and 45 days' allowance in accordance with Bangladesh's Labour Code.
The Besimco Group invests in a wide range of industries, including pharmaceuticals, real estate and energy. For the past four months, the group has been crippled by a liquidity crisis, falling demand and labor unrest.
At the same time, the central bank's takeover of its outstanding loans has added to the woes.
Last month, workers at the Besimko factory blocked a road over unpaid wages and dispersed only after the government stepped in and paid them.
Ali, a member of the interim council, noted that while the government had provided wage support, continued funding was not realistic.
He also revealed that the government was looking into turning some factories into independent operations, but out of the hands of their former owners.
No government support was pledged
Founder controversy and group fate
Chowdhury, the group's representative, said that although the government had promised support, it had actually failed to deliver.
He noted that the group, whose clients include Marks & Spencer and Inditex, the owner of Zara, has spent 3 billion Taka ($25.1 million) since August, most of which has been used to pay staff, but revenue is far from enough to cover expenses.
One of Besimco's founders, Salman F. Rahman, a former confidant of Prime Minister Sheikh Hasina, is now derided as the "father of the default culture" for defaulting on $42 billion in bank loans.
At present, Besimco's textile and clothing division is marked "temporarily closed", and the future revival is still uncertain.
Follow us for more info. wedding & event linen suppliers wholesale Readortex, official website and B2B online store