Jobs drying up as private sector struggles to survive

Infographic: TBS

As companies scale back and fight for survival, Bangladesh's private sector – the lifeline of its labour market – is slowly fading. Inflation, currency swings, energy shortages, and political tensions have battered businesses for the last three years. The result: job losses are piling up quietly in a sector that employs nearly 95% of the entire workforce.

"Everywhere we look, fresh hiring has almost come to a standstill, vacancies remain unfilled, and some factories are shutting down altogether," said Farooq Ahmed, secretary general and CEO of the Bangladesh Employers' Federation (BEF).

"This is the third consecutive year that firms are cutting costs by trimming their workforce – often quietly, without any fanfare," he added.

The BEF, representing 25 industry associations and more than 170 leading firms including Square, ACI, Transcom, and Beximco, accounts for nearly a third of the over 1.1 crore direct private sector jobs.

Farooq estimates the BEF members' workforce has shrunk by 3% in the past two years. If temporary and seasonal workers are counted, the contraction could be as high as 5%, he noted.

The shrinking workforce is only one part of a wider employment crisis. Fahim Mashroor, CEO of bdjobs – the country's largest online job portal – said job postings dropped by 10% in the first 11 months of FY25, compared to the same period a year earlier.

"We are ending the fiscal year with 5% less revenue. But the scarier part is the halt in recruitment across industries. Even the few companies expanding are doing so cautiously, mostly with interns or part-timers," said Mashroor, who was also a member of the planning ministry's economic reform taskforce.

His fears are echoed in the data. The taskforce report, submitted in February, revealed that of the 22 lakh new job seekers entering the market each year, nearly 7 lakh are university graduates. Only about 1.5 lakh of them find formal sector jobs annually – this year, it dropped below 1 lakh, Mashroor estimates.

"The July uprising was about jobs. We submitted our recommendations in February, but no one in the interim government has even contacted us for a follow-up," he added, with evident frustration.

Private sector on a tightrope

Business leaders across industries describe a grim scenario where not just hiring, but retaining current employees has become a financial tightrope.

Md Mashequr Rahman Khan, president of the Bangladesh Society for Human Resource Management, said the struggling firms have trimmed 10%-15% of their workforce since 2022.

"Even those managing to avoid layoffs have stopped filling vacant positions. Teams are downsizing to deliver the same output, without salary increments amid high inflation. That's a recipe for internal frustration," said Mashequr, who leads a network of over 4,000 HR professionals.

Md Shahidullah, who leads both the Bangladesh Steel Manufacturers Association and the Bangladesh Cement Manufacturers Association, said his sectors have seen workforce cuts of up to 20% in the past two years. Construction rod consumption dropped 13% this year after a 17% drop in FY24, he added. Cement demand also declined by around 5%.

"The energy crisis, higher costs, political unrest – everything is hitting businesses. Ten steel mills shut down this year alone, costing 10,000 jobs that barely made headlines," said Bangladesh Steel Manufacturers Association Director SK Masadul Alam.

Automation and closures are squeezing jobs despite new factory launches in the country's flagship apparel sector. Fazlul Hoque, former BKMEA president, said the industry's workforce of 4 million has already shrunk by 4%-5% in the past two years.

Software companies, too, are reeling from halted government procurement and a shrinking local market. "We had around 1 lakh software engineers across 2,500 firms two years ago. The workforce has shrunk by about 20%," said Mostafizur Rahaman Sohel, former director of the Bangladesh Association of Software and Information Services (BASIS).

Even billion-dollar conglomerates are feeling the squeeze. City Group, employing over 18,000 people across 40 companies, has had to delay the launch of seven new factories by two years due to energy constraints and policy uncertainties.

"With no new expansion plan, we are rushing to start production in the already built factories for some cash flow and the 4,000 planned jobs," said Reza Uddin Ahmad, executive director (finance and investments) of City Group.

"No investor is comfortable in this environment. Everyone is in wait-and-watch mode," said Rizwan Rahman, former president of the Dhaka Chamber of Commerce and Industry (DCCI).

There are outliers

Still, some corporate outliers continue to defy the downturn. Pran-RFL, which has been expanding for years, has created 2,000 new jobs in the past one year, raising its workforce to 1.57 lakh.

ACI, with 25,000 employees, has grown its workforce by 10% over the past year, according to a senior official of the group.

Steel market leader BSRM had its new plant ready, and it started production in January, creating nearly 1,000 jobs in Chattogram, according to its Managing Director Aameir Alihussain.

Interns replace graduates

The recent bdjobs Intern Fair in Dhaka told a story of desperation. Employer participation rose by 50%, but what was more telling was the queue – longer, more anxious, and filled with overqualified candidates.

"Companies are replacing graduate hires with interns," said CEO Fahim Mashroor.

Govt's balancing act

The interim government has made moves to restore macroeconomic stability, with exchange rate reforms and efforts to contain the fiscal deficit under 5% of GDP, according to a recent World Bank report. But these efforts come at a cost – public investment is being compressed, and regulatory vulnerabilities persist.

The banking sector, too, remains fragile. Non-performing loans doubled to 20% in early 2025, from 10% at end-2023. Meanwhile, Bangladesh Bank data shows capital machinery imports fell 23% in the first nine months of FY25, following a 28% drop in FY24 – a clear signal of stalled industrial activity.

Private sector credit growth remains at historic lows, far below inflation and borrowing rates.

The road ahead

As the World Bank predicts a 3.3% GDP growth this year – the lowest in 36 years – some 30 lakh people may fall back into extreme poverty.

However, the Bangladesh Bureau of Statistics estimated a 3.97% GDP growth in FY2024-25 on 27 May.

"This is not a cyclical slowdown. It is structural," said a top executive of a multinational company who requested anonymity. "Unless we fix the fundamentals – rule of law, democracy, energy, and confidence – job creation will remain a dream."

Bangladesh Employers Federation CEO Farooq Ahmed said, "Firms have to survive and thrive to hire new people. Right now, they are barely surviving."