British Fashion Giant Next Closes Factory in Sri Lanka, Leading to Protests
British fashion giant Next has abruptly closed one of its three factories in Sri Lanka, resulting in the immediate redundancy of approximately 1,400 workers and sparking protests on Wednesday.
The factory, situated in the Katunayake Free Trade Zone near Colombo, made the announcement of its closure on Tuesday, offering severance packages to the 1,416 employees who were laid off overnight.
David Reay, Next’s director of manufacturing, explained that the decision to shut down the factory was inevitable due to its lack of profitability over the past few years, attributing it to “increasingly high operating costs.”
Credit: The Economist
Despite the closure of this particular factory, Next will continue to operate its remaining two factories in Sri Lanka.
The Free Trade Zones and General Services Employees Union, a prominent trade union, has voiced its opposition to the closure, with General Secretary Anton Marcus confirming that over 800 union members were affected. The union has vowed to take legal action to safeguard the jobs of their members, disputing the claim of unviability and asserting that the closure without consultation violated a collective agreement.
This sudden shutdown comes on the heels of warnings from Sri Lanka’s apparel industry last month about potential US tariffs that could disrupt the island’s largest export sector and jeopardize thousands of jobs. Although a 44% US tariff on Sri Lankan exports has been postponed, a new 10% baseline tariff is currently in effect.
It is worth noting that Sri Lanka’s garment exports amounted to $4.76 billion last year, supporting around 350,000 workers and serving as a crucial source of foreign exchange for the country.
