An apparel company in Hawassa Industrial Park has laid off a third of its staff, leaving 600 workers out of jobs.

The Hong Kong-based Epic Apparel Plc set up shop in the park in 2017 but lost major buyers in North America following Washington's decision to delist Ethiopia from the Africa Growth & Opportunity Act (AGOA), a duty- and quota-free trade privilege the United States granted selected African countries. A month ago, Epic Apparel's senior managers announced to employees their decision to lay off hundreds of employees, including managerial staff, blaming a market loss and substantial drops in orders from international buyers.

In an email response to Fortune, managers said the company began to face a fall in orders following the COVID-19 pandemic in early 2020. American buyers stopped placing orders recently, according to the managers. The Children's Place, a US retailer, is one of the company's significant buyers.

It is a frustration shared with leaders of the company's labour union. Epic Apparel is incurring additional costs in duties following Ethiopia's suspension from AGOA, putting the company's operations in jeopardy and putting machinery idle, according to a letter issued to the union leaders.

Five production lines remain idle, according to Epic Apparel's representatives.

In a letter posted online before Ethiopia was delisted from AGOA privileges in January this year, Rohit Nair, vice president of Epic Apparel Plc, forewarned that “AGOA was the sole incentive that attracted the company to move to Ethiopia.”

“The company shipped some of the machinery abroad,” reads the letter issued to the labour leaders. “It has incurred heavy losses due to the termination [of AGOA].”

Epic Apparel, a subsidiary of Epic Group, has been in apparel manufacturing for 35 years with an annual turnover of 20 million dollars. The Group employs 30,000 people across the globe, with production facilities in four countries, including Bangladesh, Vietnam, and Jordan. It leased two sheds in Hawassa Industrial Park, producing 20,000 pairs of pants a day.

The company has paid six months' salary to the laid-off employees, representing 40pc more than the amount required by law.

Kirubel Zena is one of the workers Epic Apparel let go. Though he had studied sports science, Kirubel had a hard time finding work in sports before landing a job at Epic Apparel two years ago that enabled him to provide for his daughter and wife. He worked as a training manager, grossing 13,000 Br a month.

Although the six months' pay, coupled with his wife's 5,700 Br monthly income, gives him some breathing room, Kirubel is uncertain about his future.

“I don't know when I'll get another job,” he said.

Leaders of the labour union were in month-long negotiations with management to safeguard the interests of the laid-off workers. Two weeks ago, management verbally informed union leaders of the possibility of laying off more employees, according to Segasetu Alemayehu, the labour union leader.

Close to 2,100 employees of Epic Apparel have been organised under the labour union. They are part of the 22,700 employees working for 15 companies in Hawassa Industrial Park. The latter formed labour unions in October 2021 under the auspices of the Industrial Federation of Textile Leather & Garment Workers Trade Union.