Vietnam’s strong gdp growth fails to ease labor market distress

DNHN - As the year draws to a close, the pressing challenge for businesses and policymakers is how to rebuild worker morale, retain top talent, and stabilize employment amid lingering uncertainty.

Vietnam’s economy posted an impressive gdp growth rate of 7.52 per cent in the first half of 2025. Yet this headline success hides a more sobering reality: the labor market remains under pressure, marred by widespread layoffs and a growing sense of job insecurity. As the year draws to a close, the pressing challenge for businesses and policymakers is how to rebuild worker morale, retain top talent, and stabilize employment amid lingering uncertainty.

A second-quarter labor market report from job platform Vieclam24h, titled “the current state of worker sentiment and the disconnect between labor supply and demand”, surveyed nearly 3,000 individuals, including close to 2,000 workers and 1,000 businesses between may and june 2025.

The findings are concerning. Layoffs are no longer confined to manufacturing sectors like textiles, footwear, and electronics. Retail, finance, and even the previously resilient tech industry have begun shedding workers. Over 2,500 bank employees have been dismissed. Globally, the tech sector lost 72,000 jobs, while retail lost 64,000.

The situation reflects both global headwinds and vulnerabilities in Vietnam’s labor model, which leans heavily on exports, especially to the us (30 per cent of total exports). The fallout isn’t limited to those already out of work. Nearly half of remaining employees report feeling anxious and overburdened. Around 60 per cent no longer feel connected to their employers, and 80 per cent are actively exploring new job opportunities. Half of those have already taken concrete steps to resign.

This signals a deeper crisis: a wave of “silent quits” from high-performing staff and a breakdown of trust in leadership. A separate survey by hr consultancy Talentnet revealed that just 29 per cent of employees still trust their leadership teams. According to labor psychologist dr. Bui Hong Quan, broken trust cannot be repaired by pay raises or policy tweaks alone—businesses must take mental well-being as seriously as productivity.

The report also highlights the uneven impact of the downturn. Workers aged 18–24 and 35–54 are hit hardest. Interns, fresh graduates, manual laborers, and employees in operations, engineering, and finance see the highest layoffs. By contrast, roles related to customer engagement and digital growth—marketing, sales, and it—are more secure.

This divergence underlines a widening opportunity gap as companies double down on digital transformation and growth-oriented roles.

Anxiety and opportunity amid a changing job landscape

The strain is being felt across workplaces. “I still show up and get paid,” shared a real estate worker in ho chi minh city, “but I’m constantly worried I’ll be the next to go. I stay silent, avoid risks, and every day feels like a tightrope.”

As morale declines, voluntary resignations are rising. Yet there are glimmers of resilience. Despite financial and emotional stress, nearly 30 per cent of laid-off workers see this period as a time for reinvention—a far higher rate than global averages. This reflects the adaptability and optimism of Vietnamese workers.

Looking forward, the second half of 2025 brings potential recovery. Vietnam’s gdp is forecast to surpass 8 per cent this year. This growth is prompting over half of surveyed businesses (56.2 per cent) to plan new hires, especially in sales, business development, engineering, skilled trades, and middle management.

Services and industry—key drivers of the economy—contributed 8.1 and 8.3 per cent, respectively, to gdp in the first half. Exports jumped 18 per cent and retail sales climbed 9.3 per cent, suggesting strong demand for labor in these sectors.

A bumpy road to recovery

Still, recovery won’t be uniform. Talent shortages and rising jobseeker expectations are complicating recruitment. Around 77.4 per cent of businesses report more difficulty hiring than in 2024. Mismatches between employer strategies and worker demands—especially around compensation—are further straining the job market.

Young workers are particularly at risk. Only 23.4 per cent of businesses plan to hire fresh graduates or interns, despite this group being most vulnerable to layoffs. Without proactive support, the country risks sidelining a vital source of innovation and growth.

Encouragingly, workers are already making moves. Over 72.7 per cent of those laid off have re-entered the job market, and 24.7 per cent have secured new roles. But to truly turn the page on today’s instability, both employers and employees must act with urgency.

Building a more resilient workforce

For businesses, four strategies are critical:

1. Communicate transparently about layoffs and changes.

2. Invest in upskilling and improve compensation to retain core talent.

3. Adopt smart technology to boost productivity without overburdening remaining staff.

4. Refine hiring strategies, with a focus on roles in sales, engineering, and it.

For workers, three tactics stand out:

1. Stay adaptable by learning new skills, especially in services and digital roles.

2. Develop a strong personal brand, using platforms like Vieclam24h and professional networks.

3. Manage financial expectations realistically and stay informed on labor market trends.

The first half of 2025 revealed a clear disconnect between strong economic growth and a fragile labor market. Layoffs, burnout, and declining engagement threaten workforce stability, even as emerging sectors show signs of recovery.

But if companies and employees are willing to embrace change and adapt decisively, Vietnam’s labor market can emerge from this transition stronger, more balanced, and more resilient.

Vu Quy