Impressive GDP growth of 7.52 per cent in the first half of 2025 failed to curb the woes besetting Vietnam’s labor market, which has been marked by a wave of workforce reductions. Beyond concerns about human resources quality, regional imbalances, and the high share of informal employment, a more pressing issue is taking center stage: the growing fear of job insecurity. So the big question is: how can businesses and policymakers rebuild morale, hold on to top talent, and ensure stability in the labor market as the end of 2025 approaches?

Layoffs loom

Job app Vieclam24h’s labor market report for the second quarter of the year, entitled “The Current State of Worker Sentiment and the Disconnect Between Labor Supply and Demand”, draws on a survey of nearly 3,000 respondents, conducted between May and June this year and including close to 2,000 workers and around 1,000 businesses.

The report paints a sobering picture. The wave of layoffs is no longer limited to manufacturing industries like textiles, footwear, and electronics, and are now hitting retail, finance, and even the once-resilient tech sector. According to the data, over 2,500 banking employees have been let go, while export-oriented manufacturers continue to downsize. Globally, the tech industry lost 72,000 jobs and retail another 64,000. These figures reflect not only global economic pressures but also a growing sense of instability in Vietnam’s labor market, which relies heavily on exports, with 30 per cent going to the US.

But the consequences reach beyond those who have already lost their jobs. The report reveals that nearly half of the remaining workforce feels increasingly burdened and anxious about their job security. Around 60 per cent say they no longer feel connected to their company, while 80 per cent are exploring other opportunities. Half of those have already taken action to leave. This points to a silent wave of resignations and a deeper crisis of morale and trust, as high-performing employees quietly exit organizations.

Trust in leadership is also eroding. A recent survey by human resources (HR) consultants Talentnet showed that only 29 per cent of employees still have confidence in their management teams. Labor psychologist Dr. Bui Hong Quan has warned that once trust is broken, no amount of pay raises or policy changes can repair it. Companies, he believes, must invest in employee mental well-being as seriously as they do in productivity.

The report also highlighted which groups are bearing the brunt of the downturn. Young workers aged 18 to 24 and older employees between 35 and 54 have been hardest hit. Interns, fresh graduates, manual workers, and staff in operations, engineering, and finance are seeing the highest rates of layoffs. In contrast, roles tied to customers and digital growth, such as marketing, sales, and information technology (IT), are more likely to be retained.

This uneven impact reveals a deeper trend. As companies shift their priorities towards growth and digital transformation, the gap in opportunity across different workforce segments is widening. For many, the playing field is no longer level.

From uncertainty to opportunity

Anxiety in the workplace is taking a toll not just on employee performance but also on overall workplace productivity. “I still go to work and get paid, but I always feel like I’ll be the next to be laid off,” said one real estate worker in Ho Chi Minh City. “I don’t dare speak up or make mistakes. Every day feels like walking a tightrope.”

On the business side, companies are seeing a rising wave of voluntary resignations as employee morale continues to decline. But the report also offers some positive signs. Despite the emotional strain, with over 70 per cent of laid-off workers experiencing financial stress or a loss of motivation, nearly 30 per cent view unemployment as a chance to pivot and grow, a significantly higher ratio compared to international studies. This reflects a strong adaptability among Vietnamese workers and a hopeful sign for future recovery.

Looking ahead, the second half of 2025 still holds promise of a recovery in the labor market. One major driver is the country’s GDP growth, which is projected to exceed 8 per cent this year, putting pressure on businesses to expand operations. The Vieclam24h report found that 56.2 per cent of companies plan to increase their headcount, especially in roles such as sales, business development, manufacturing engineers, skilled workers, and mid-level managers.

This momentum is being fueled by robust growth in services and industry, which contributed 8.1 per cent and 8.3 per cent, respectively, to GDP in the first half of this year. Exports rose 18 per cent and retail sales 9.3 per cent, suggesting continued demand for employees in these areas.

However, the recovery is unlikely to be uniform. Many businesses are still struggling with recruitment. Around 77.4 per cent report greater hiring difficulties compared to 2024, largely due to a shortage of qualified candidates and rising expectations from jobseekers. The mismatch between employer hiring strategies and worker expectations for compensation is making the job market increasingly difficult to navigate. To address this, companies must rethink their approach by enhancing benefits, investing in skills training, and rebuilding trust through transparent communication.

Young workers, in particular, face steep challenges. Only 23.4 per cent of businesses plan to hire recent graduates or interns, while those aged 18 to 24 remain the most vulnerable to layoffs. Without sufficient opportunities, the untapped potential of young talent risks being wasted during a period of strong economic growth.

Employees are, however, showing signs of resilience and initiative. According to the report, 72.7 per cent of those who lost their jobs have already returned to the job market, and 24.7 per cent have found suitable positions. But to truly move past the current instability and seize the opportunities in the months ahead, both employers and employees need to act more decisively.

For businesses, four areas of focus are critical. First, ensuring transparent communications about layoff decisions. Second, investing in skills development and improving compensation to retain talent. Third, adopting smart technologies to boost productivity and reduce the burden on remaining staff. And fourth, refining recruitment strategies by prioritizing key positions in sales, engineering, and IT.

For workers, three key strategies are essential. First, remaining flexible and be open to acquiring new skills, especially in technology and services. Second, building a personal brand through professional networks and platforms like Vieclam24h. And third, realistically managing financial expectations and monitoring market trends to make informed career decisions.

Vietnam’s labor market exhibited a clear disconnect in the first half of the year. Economic growth is strong, but recruitment remains a challenge. Layoff anxiety and declining employee engagement threaten workforce stability, even as growth sectors present new possibilities for recovery. If both businesses and workers step up and embrace the changes needed, the challenges of today could pave the way for a more sustainable and resilient labor market as the year comes to an end.