Another Shenzhen foreign trade factory collapsed and laid off all employees!

Affected by the global economic downturn, overseas demand continues to be weak and order volume is declining. China's traditional foreign trade factories are facing unprecedented challenges.

It is learned that recently, Shenzhen Weiqun Precision Machinery Products Development Co., Ltd. issued a closure notice: After careful consideration, the company decided to officially stop production and business on June 6, 2024, and all employees will be dismissed ahead of schedule.

The notice stated that the reason for the factory's closure was that since the epidemic, the global economy has been in recession and the factory's operating difficulties have become increasingly serious . The company has been struggling to support the livelihoods of all employees and has been unable to continue to this day, so it had to disband early.

At the same time, the factory has made arrangements for its employees: according to the National Labor Law and other relevant laws and regulations, corresponding compensation will be made to employees who have not reached the legal retirement age.

Public information shows that the factory was established in 1993 and has a history of more than 30 years. It is located in Longgang District, Shenzhen, and has more than 300 employees . It mainly produces sewing machine accessories, cutting tools, woodworking tools and various precision accessories. It has created its own brand "Golden Eagle" and marketed it worldwide, and is well-known in the industry.

According to industry insiders, the factory's products are mainly sold overseas and it is highly dependent on overseas markets . After the epidemic, the continued shrinkage of overseas consumer demand has had a huge impact on its operations. The trend of losses has been difficult to reverse so far, which is the main reason for the factory's collapse.

It is worth mentioning that although the factory gave reasonable compensation to employees in the notice of closure, it still did not change the risk that more than 300 employees in the factory would face unemployment after the factory closed down. Therefore, when the news spread in the industry, many sellers were very sad about it.

In fact, the turbulent global economic environment has become an industry consensus. Under the shackles of multiple factors such as exchange rate fluctuations, rising operating costs, and weak recovery in overseas demand , Shenzhen Weiqun is not the only factory that has been hit by cold orders and even fallen into operating difficulties.

It is understood that in the first half of 2024, there have been reports that many foreign trade factories in the industry have suffered operational setbacks.

On January 12, an electronic toy factory in Shenzhen issued a notice of suspension of work and production: Due to the epidemic and the poor economic environment in recent years, the company has faced severe operating pressure and has been in a loss-making state. It has decided to stop production on January 12, 2024 and all employees will be dismissed. It is understood that the factory was established in 1994, and the total number of employees at its peak was even as high as tens of thousands.

On March 25, a hardware factory in Foshan also stated that due to the impact of the European and American economies, the reduction in orders , and unexpected factors within the company, it decided to stop production and close down on March 21, 2024. It is understood that before the company announced its closure, it had been repeatedly reported by the industry that there were problems with its cash flow and that it owed several employees several months' wages.

In addition, not long ago, a well-established Hong Kong-funded electronics factory in Dongguan also issued a notice, saying that since the outbreak, the company has failed to make breakthroughs in business expansion, and the continuous reduction in orders in the past two years has caused the company to suffer serious losses and unable to operate normally. It decided to close and liquidate on May 30, 2024. It is reported that the factory has a history of more than 30 years since its establishment, and its products are also mainly exported to the European and American markets .

Based on the above closure news and market analysis, it is not difficult to see that many foreign trade factories are now under unprecedented pressure: