Textile Industry in Deep Crisis: Sector Loses 300,000 Jobs as Firms Collapse

Turkey’s once-thriving textile and apparel industry, a cornerstone of national employment and export revenue, is now facing one of the gravest downturns in its history. According to a report by Elif Özge Yalçın for Cumhuriyet, the sector, which provided jobs to 1.225 million people in 2022, has now shed nearly 300,000 positions by the first quarter of 2025. Over 2,100 companies have shut down, and the outlook continues to darken.

35,000 Jobs Lost in Just Three Months

Between January and March 2025 alone, the sector saw the dismissal of 35,460 employees, with 2,147 firms ceasing operations. As of late May, 283 companies had filed for concordatum, positioning the textile industry as the second most at-risk sector in Turkey after construction in terms of bankruptcy declarations.

Inflation and Interest Rates Erode Profit Margins

Toygar Narbay, Co-President of the Turkish Clothing Manufacturers Association (TGSD), attributes the sector’s collapse primarily to unstable economic policies. He notes that official inflation soared by 138% between 2022 and 2024, while the minimum wage jumped by 249% and the policy interest rate rose 258%. In contrast, the exchange rate only increased by 101% during the same period.

Narbay emphasized, “In this financial climate, how can any sector survive?” He explained that average pre-tax profit margins fell from 10.5% in 2022 to 5.6% in 2023, and are now in negative territory at -5% in 2025.

Currency Pressures and High Rates Are Crippling the Industry

Narbay warned that sustained high interest rates and currency interventions are eroding company equity, pushing firms to the brink of insolvency. He stressed that textile remains Turkey’s highest value-added sector, yet the depth of the crisis surpasses what industry players can resolve on their own.

To stabilize the situation, Narbay proposed:

• 10% currency conversion support for net exporters

• Reducing rediscount loan rates to half of the central bank policy rate

• Delaying interest collections until the end of payment terms

• Offering 2,500 TL per employee in state support across all firm sizes

Unions Slam Government Inaction

Asalettin Arslanoğlu, Head of the Istanbul Branch of the Textile Workers’ Union, accused the government of neglecting the industry. He argued that legal protections for unionized workplaces are not enforced, and claimed that employers exploit every legal loophole to avoid unionization.

“The law mandates that the highest industry-wide contract should apply across the board, but this isn’t happening,” Arslanoğlu said. “The government still treats this sector like a pile of rags.”

“Workers Pay the Price of the Crisis”

Mehmet Türkmen, President of BİRTEK-SEN, emphasized that workers are the biggest victims of this economic unraveling. In provinces like Gaziantep, Urfa, Malatya, and Adıyaman, he reports that about 10,000 textile workers have lost their jobs in recent months.

Türkmen criticized employers for forcing workers to sign away their severance rights under pressure, while continuing to receive state incentives despite employing people at low wages or without insurance.

“What they want is simple,” said Türkmen. “Let the state cover all taxes, give subsidies, and transfer the entire unemployment fund to employers. That’s not justice.”

Textile Sector on the Brink

With production, exports, and employment all in decline, the textile industry is sending out an economic distress signal. Stakeholders are calling for urgent government intervention and structural reforms. Without decisive action, Turkey risks losing its competitive edge in one of its most strategic export sectors.