Abe said the company was cutting its production of optical disk drives because of reduced global demand, but he said production of some other products at its Hanoi factory was scheduled to increase so the layoffs might not be too deep.

Panasonic Vietnam employs 3,000 workers at the plant.

Numerous companies based in Ho Chi Minh City have announced they would cut hundreds of workers or go out of business since Vietnam's lunar New Year holiday, or Tet, ended Sunday.

The garment and dry-cleaning firm Hung Man Co said it would close its doors February 10, leaving its 600 workers jobless. Light manufacturing company Thuan Phong Co with 100 workers said it would shut down at the end of March. Plastic-bag manufacturer Bao Ma Co plans to send its 100 workers home until December because of a lack of capital.

Vietnam's Government Statistics Office reported that industrial production fell 8.6 per cent from December to January. Exports of shoes, garments and textiles have fallen 25 to 30 per cent, a Trade Ministry official said.

New foreign direct investment slowed to 185 million dollars in January, down 90 per cent from a year earlier.

Vietnam's government announced a 1-billion-dollar stimulus package late last year to raise domestic demand. Some of that money is to be used by the central bank to provide a 4-per-cent interest-rate subsidy on loans used for projects in high-priority sectors, the State Bank of Vietnam announced Wednesday.

Deutsche Presse Agentur - February 6, 2009