Staff Correspondent

Bangladesh’s private sector, which employs 95% of the workforce compared to the government’s 5%, faces a deepening crisis as credit growth plunges to a four-year low of 7%. With capital machinery imports plummeting 34% in FY25, businesses are halting expansion plans—leaving educated youth disproportionately unemployed.

A World Bank report published in October 2024, titled Bangladesh Development Update, revealed a sharp rise in joblessness among tertiary-educated youth — 27.8% of the unemployed in 2022, up from just 9.7% in 2013.

Despite an average economic growth of 6.5% over the years, many graduates are struggling to find jobs. Inflation outpacing wage growth has only compounded the crisis.

TURBULENT JOB MARKET

The job market reflects this turbulence. Bdjobs, the country’s largest job portal, saw a rise in postings in August following the fall of the Awami League government — jumping from 6,500 in July to 8,888. However, political uncertainties dragged postings down to 7,000 in September before climbing past 8,300 in January.

“We ran promotional offers for small and medium enterprises to encourage hiring,” said Bdjobs Managing Director Fahim Mashroor.

Still, most companies are only hiring to replace vacant positions rather than creating new jobs. “Investment appetite is declining, and fresh job creation is limited,” he said.

Bangladesh Bank’s data supports this, showing a sustained drop in capital machinery imports — another signal of slowed business expansion.

Shams Mahmud, a former president of the Dhaka Chamber of Commerce and Industry, pointed out that prolonged inflation has pushed companies to use accumulated funds for working capital instead of capacity expansion.

“Businesses are in survival mode. While some displaced workers found new jobs, the slow economy delays full recovery,” he said.

The slowdown hits almost all sectors in the economy other than the export-oriented firms that have already entered a recovery path and are seeing higher export earnings.

IT AND MANUFACTURING SECTORS UNDER PRESSURE

Mostafizur Rahman Sohel, managing director of Advanced ERP (BD) Ltd and a former senior vice president of the Bangladesh Association of Software and Information Services (BASIS), said that over 2500 member firms of the association had a workforce of around 1 lakh IT graduates before 2022.

It dropped to 70,000-80,000 already as the local software market shrunk, he said, adding that government procurement is almost halted and the private sector is waiting for good days to proceed with their IT investment plans.

Fahim Mashroor, a former president of BASIS, said every year more than 20,000 IT graduates are entering the job market and the industry is not capable of accommodating more than half of them.

They are opting for international freelancing, and some are trying to build their own businesses, said Sohel.

Some recruitment in the IT sector is taking place as export-oriented firms are hiring, he said, adding the new challenges in the global technology market should be addressed proactively.

Aameir Alihussain, managing director of the country’s largest steel maker BSRM, said the economic situation is not favourable for new investments at all amid the high borrowing costs, fall in consumption and political uncertainties.

National demand for steel is 20% lower than that a year ago due to government austerity and private sector’s challenges, he estimates.

Aameir said that in a growing economy with a youth population like Bangladesh, construction employs hundreds of thousands of people and the slowdown made their lives tough.

All expansion plans are halted. Only a very few of the projects near the finishing line are seeing an accomplishment to create some new jobs, he added.

Irfan Uddin, general secretary of Bangladesh Ceramics Manufacturers and Exporters Association, said some 8 lakh jobs were created by his industry with some 8-10% annual average growth in the workforce. In the past six months, some entry-level recruitments took place, but the growth rate was less than 5%.

Some companies went off operations due to the gas crisis, and some new factories securing gas added to the force.

BUSINESSES CUT COSTS THROUGH WORKFORCE OPTIMISATION

Businesses are in dire need to control costs in the tough business situation and the rapidly evolving technological environment is forcing all to opt for smart optimisation of human resources, said Humayun Rashid, former president of the International Business Forum of Bangladesh.

Rashid, managing director of Energypac, a top electromechanical conglomerate in the country, said internal succession for senior positions is helping control payroll hikes slightly, but not enough for companies fighting the battle with inflation, surging costs, and capacity underutilisation.

PRAN-RFL Group, a top private sector employer, added some 3,000 people to its workforce of 1.45 lakh after 5 August, thanks to its new units, According to its Director Kamruzzaman Kamal.

Construction material for Fast-moving consumer goods (FMCG) conglomerate Abul Khair Group, creating some 55,000 jobs, halted its new projects amid the economic adversities and political uncertainties, said its Group Head of Corporate Affairs and Legal Sheikh Shabab Ahmed.

JOB MARKET STAGNATION WORSENS EMPLOYMENT OUTLOOK

Prokash Roy, a director of Bdjobs said, “We do not have exact data to determine the decline in employment opportunities. But overall, it can be said that the job market in the country has lost momentum, and there has been hardly any growth in the last six months due to a lack of new investment.”

“In some cases, there is a negative trend. Many people are losing their jobs and have not been able to find new ones. On the other hand, vacant positions are also not being filled, which is worsening the situation,” he explained.

PHP Family, one of the leading business groups in Chattogram, which employs over 35,000 people in more than 16 industries, has already laid off about 300 workers from its Bay Terminal project in Chattogram’s Patenga.

Mohamed Ali Hossain, managing director of PHP Family,  “Every year, we launch new projects and create employment opportunities for both fresh and experienced job seekers. In the last year, especially in the past six months since the political shift, we have not been able to offer any job opportunities. Instead, we had to lay off over 300 workers from one of our previously profitable ventures.”

“Our steel plant has also been experiencing the impact of a demand crunch. As there is hardly any demand for steel, we had to suspend production for over three months. We are still paying wages to the workers while keeping them idle, but we do not know how long we can afford to do so,” he said.

“Kabir Group of Industries (KSRM Group), a leading conglomerate in the commercial capital with over 20 ventures, has also curtailed hiring.”

Mehrul Karim, CEO of Kabir Group, “Both the local and international markets are slow. There is hardly any industrial growth. In the last six months, we have not been able to offer large-scale employment opportunities. We recruited a few personnel when vacancies arose, but otherwise, there were no new job openings in our group. However, we have not laid off any employees yet.”

Premier Cement, one of the leading cement manufacturers in the country, which has two production units, also could not offer any employment in recent months.

RMG REMAINS RESILIENT

Yet, in this grim reality, Bangladesh’s resilient apparel sector has held firm. Exporters have managed to retain employment, buoyed by rising global orders.

Some 60 garment factories shut down in 2024, but the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) saw nearly 100 new members emerge, creating jobs for workers and executives.

“Many factories are staying afloat with steady orders, ensuring the industry continues to provide jobs,” said Mahmud Hasan Khan, managing director of Rising Group and a former BGMEA vice president.

However, the industry’s backward linkages — spinning and textile mills — have crumbled under pressure. Employment in these sectors has declined by nearly 20% over the past year.

“Textile mills struggle due to energy crises, unfair competition from imported yarn, and plummeting sales,” said Bangladesh Textile Mills Association (BTMA) Vice President Saleudh Zaman Khan.

“We estimate nearly a million jobs in this sector, but employment has shrunk significantly,” he said.

BTMA President Showkat Aziz Russel noted Indian yarn now costs less in Bangladesh than domestically in India.”

“We have long been urging the government to stop yarn imports through land borders, which were opened by the previous [Awami League] government. In 2024 alone, official yarn imports from India stood at $2.7 billion, translating to a loss of around 100,000 local jobs. Unofficial imports pushed that figure even higher,” he said.

INVESTOR CONFIDENCE SHAKEN BY POLITICAL UNCERTAINTY

Golam Kibria, chief financial officer of Premier Cement, said that new employment depends on industrial growth. “Due to the economic slowdown, when existing industries are struggling to survive, entrepreneurs are afraid of investing in new projects, which is holding back growth. As a result, no new jobs are being created,” he added.

Azam J Chowdhury, founder of East Coast Group, said energy and power supply at a fair price is crucial for companies looking for new investments. The government should desperately look for it to create jobs.

Also, during the interim government, administrative work seems to have been slowed down. A lack of government-private sector interaction to tackle the economic challenges is worsening the investment climate, he said, adding that the government’s commitment to investors also should be upheld.

Humayun Rashid said political uncertainties and a worsened law and order situation added to the challenges in attaining and retaining investors’ confidence.

Businessmen are waiting for the election and a stable elected government before moving with the investment plans, said each of the entrepreneurs.