Guide To Restructuring A Cross-Border Workforce 2026 – Vietnam

Reduction in workforce

1. Is there a concept of redundancy - based on a shortage of work or other economic reasons - as a justified reason to dismiss employees in your jurisdiction? If so, how is it defined?

Employers in Vietnam are permitted to terminate labour contracts on the grounds of redundancy in the following cases:¹

• Technological or organisational changes (at the level of the employer), which include:
  • changes in organisational structure or personnel rearrangement;
  • changes in processes, technology, or equipment associated with the employer's business lines; and
  • changes in products or product structure.

In such circumstances, if the employer has a new vacancy, it must prioritise retraining and rehiring the affected employees for continuing employment.²