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2mo ago

Vietnam Approves Sweeping Cuts to Public Sector Jobs and Ministries

The restructuring plan will eliminate 20% of public sector jobs and reduce government ministries from 30 to 22, aiming to boost efficiency and cut costs.

A general view of the Vietnam National Assembly during the opening ceremony of its 7th session, in Hanoi, Vietnam, May 20, 2024. REUTERS/Thinh Nguyen/ File Photo
Vietnam will cut one in five public sector jobs and slash billions of dollars from government budgets
Vietnam's radical costcutting reforms are creating unease in a communist country where working for the state long meant a job for life

Overview

  • Vietnam's National Assembly approved a major government reform plan, cutting 15-20% of state apparatus, including five ministries and multiple agencies.
  • The overhaul will eliminate one in five public sector jobs over the next five years, affecting up to 100,000 workers initially through layoffs or early retirement.
  • Authorities estimate the reforms will save $4.5 billion over five years, despite initial costs exceeding $5 billion for severance and retirement packages.
  • Mergers will combine ministries such as planning and investment with finance, and transport with construction, among others, to streamline operations.
  • The plan has sparked concerns over short-term disruptions and fairness in job cuts, though officials assure it will not impact Vietnam's investment environment.