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After two decades of operation with nearly 700 workers, 8 Star Sportswear Ltd will permanently shut down in January 2027 due to a lack of orders which has caused older employees to worry about their chances of securing new employment.
According to a Facebook post on Thursday by the Federation of Free Trade Union of Workers of the Kingdom of Cambodia (FTUWKC), the factory has agreed to pay workers all benefits required under the Labor Law. During the closure notice period, employees will also be entitled to two paid days off per week to seek new jobs.
Oun Channy, 53, a worker representative who has worked at the factory for nearly 20 years, told CamboJA News that workers are satisfied with the benefits that the factory is providing and the advance notice given. Some of them have already started looking for new jobs, but workers aged 50 and above face difficulties finding employment, she said.
Since early October, working hours have been reduced to four days a week, ending at 4 p.m., compared with previous overtime shifts lasting until 7 p.m.
She said Ministry of Labor officials visited the factory to explain the closure process and offered to help older workers find jobs, but she was unsure how to access that assistance. She estimated that 20% of the workforce consisted of workers in that age range.
Heng Sophy, a factory administrator, declined to comment and referred questions to the ministry, saying the closing was done in accordance with the law.
Ministry spokesperson Sun Mesa told CamboJA News that global and regional challenges, including the oil crisis, localized conflicts, operational disruptions and Cambodia-Thailand border tensions, has forced several factories to close.
However, he maintained that Cambodia’s garment sector remained strong. In the first nine months of 2026, nearly 50,000 factories, and Small and Medium Enterprise (SME) were operating, with more than 2.3 million workers employed, including nearly 3,000 garment and textile factories employing over 1.3 million people.
“This is progress showing that Cambodia’s garment sector remains healthy, continues to provide benefits and income, and providing employment opportunities for millions of our citizens,” he said.
Mesa stressed that factories must pay workers all legally required benefits upon closure, with some offering more than the law requires. He said there are mechanisms to help displaced workers find employment, with nearly 90,000 vacancies available across factories and enterprises in Phnom Penh and the provinces.
Say Sokny, Independent Labor Specialist, acknowledged that older workers would likely struggle to find jobs after the factory closure, while younger, experienced garment workers have better opportunities as more Chinese and Vietnamese manufacturers move operations to Cambodia as China faces high tax and Vietnamese workers move on to heavy industry jobs with high salaries.
“This $2 wage increase [this year] is an opportunity for factories to make significant profits because of cheap labor in Cambodia,” she said, noting that Cambodia also benefits from preferential trade arrangements, including the deals via the Regional Comprehensive Economic Partnership (RCEP).
“Therefore, we know from following the situation that these workers are able to find jobs immediately because they already have experience in garment.”
Sokny said the factory had faced declining orders since the COVID-19 pandemic but questioned whether the closure was solely due to a lack of orders. She opined that working conditions, union rights or an aging workforce could have influenced international buyers’ decisions, although she provided no evidence linking those factors to the closure.
She noted that this factory had long supplied UK retailer Primark and benefited from duty-free access to the British market. She also suggested that some factory owners might close older facilities and establish new ones to qualify for government tax incentives.
“Why didn’t they have purchase orders? Perhaps the brand’s home country considered not placing additional orders because the factory may have had irregular or substandard working conditions.”
Khun Tharo, program manager at labor rights group CENTRAL, told CamboJA News that they documented at least five factory closures in the first 10 months of 2026, such as High Tech Garment Apparel, ML Intimate Apparel Cambodia, NIDEC Die-casting, Sahakreas Create Bridge Company and 8 Star Sportswear Ltd. In total, it affected around 4,800 workers.
However, he added some have found new jobs, others remain unemployed, raising concerns about growing instability in the labor market.
“The resulting loss of income and employment security threatens workers’ livelihoods, heightens their vulnerability to economic shocks, and increases the risk of indebtedness, particularly for low-income households already struggling with rising living costs,” he said.
Tharo warned that the closures were not merely isolated business decisions but reflected broader economic pressures and structural challenges facing Cambodia’s export-oriented manufacturing sector.
“Without timely intervention, the burden will fall disproportionately on workers and their families and Cambodia’s long-term economic resilience,” he said.
He added that continued closures could signal declining investor confidence and raise concerns about Cambodia’s competitiveness as the country prepares to graduate from least developed country status.