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We can confirm that we have active sourcing relationships with 6 out of the 9 factories mentioned in your email. The issues you have highlighted relate primarily to workforce management practices, with specific cases cited from 2022 and 2023.

... we can confirm that our manufacturing partners have acted both lawfully and transparently and have engaged with, and sought agreement from, the plant-level trade unions and/or worker representatives in each of the named factories, prior to taking any action which would impact the workforce.

Please refer to the attached annex, which details our responses to each factory case.

• Factory: Can Sports Shoes
• Country: Cambodia
• adidas Business Status: Active
• Allegation: In August 2023 it was reported that workers in Can Sports Shoes had been suspended or terminated since July 2023, with the factory allegedly telling workers ahead of their suspension and termination that there were no raw materials, no buyers, and supply and demand were not equal
• Clarification on Allegation: Can Sports consulted with all 11 registered trade unions and obtained their written endorsement before executing the work suspension and layoffs. It has been confirmed that workers received lawful compensation during the suspension period and full severance pay for those made redundant.
• Action Taken by adidas: In accordance with adidas’ compliance policies, Can Sports disclosed and shared their workforce management plan prior to its implementation to ensure that it was executed lawfully and transparently. Subsequently, the adidas' Social & Environmental Affairs (SEA) team closely monitored the implementation and payments to the laid-off workers.

• Factory: Meng Da Footwear
• Country: Cambodia
• adidas Business Status: Active
• Allegation: In August 2023 it was reported that workers in Meng Da had been suspended or terminated since July 2023, with the factory allegedly telling workers ahead of their suspension and termination that there were no raw materials, no buyers, and supply and demand were not equal.
• Clarification on Allegation: Mengda has consulted with and secured agreements from all 17 trade unions in the factory regarding the arrangement of reduced working days, which had received approval from the Ministry of Labor and Vocational Training. During the period of low order volume in 2023, Mengda chose not to implement a mass layoffs, in favor of maintaining the workers' employment with reduced working hours.
• Action Taken by adidas: Mengda shared their workforce management plan with adidas prior to its implementation, including the approvals received from the multiple trade unions. adidas SEA team closely monitored the implementation of plan and the reduced working days, to ensure it was executed lawfully and transparently.

• Factory: Feeder Apparel Corp
• Country: Philippines
• adidas Business Status: Relationship ended in February 2024
• Allegation: In October 2022, it was reported that workers from five factories in the Mactan Export Processing Zone, including Feeder Apparel Corporation, had been retrenched workers due to the global recession, reporting a reduction and drop in orders
• Clarification on Allegation: Federer Apparel Corp, Mactan Apparel, and Metro Wear are factories under the ownership of Sports City. We have addressed the layoffs at these factories in our letter to BHRRC dated 4th November 2022. To summarize, the factories complied with all legal requirements pertaining to the layoff process and the mandated severance payment. It is important to note that adidas ended its business relationship with these three factories in February 2024.
• Action Taken by adidas: adidas' SEA team closely monitored the layoff process and, as per our labor compliance policies, asked Sports City to disclose to us their redundancy plan in advance of any layoffs. We carefully reviewed all relevant documents, including the worker notification/communications plan and severance pay calculations, to ensure they fully met legal requirements and our Guidelines.

• Factory: Mactan Apparel
• Country: Philippines
• adidas Business Status: Relationship ended in February 2024
• Allegation: In October 2022, it was reported that workers from five factories in the Mactan Export Processing Zone, including Mactan Apparel, had been retrenched workers due to the global recession, reporting a reduction and drop in orders.
• Clarification on Allegation: Federer Apparel Corp, Mactan Apparel, and Metro Wear are factories under the ownership of Sports City. We have addressed the layoffs at these factories in our letter to BHRRC dated 4th November 2022. To summarize, the factories complied with all legal requirements pertaining to the layoff process and the mandated severance payment. It is important to note that adidas ended its business relationship with these three factories in February 2024.
• Action Taken by adidas: adidas' SEA team closely monitored the layoff process and, as per our labor compliance policies, asked Sports City to disclose to us their redundancy plan in advance of any layoffs. We carefully reviewed all relevant documents, including the worker notification/communications plan and severance pay calculations, to ensure they fully met legal requirements and our Guidelines.

• Factory: Metro Wear
• Country: Philippines
• adidas Business Status: Relationship ended in February 2024
• Allegation: In October 2022, it was reported that workers from five factories in the Mactan Export Processing Zone, including Metro Wear, had been retrenched workers due to the global recession, reporting a reduction and drop in orders
• Clarification on Allegation: Federer Apparel Corp, Mactan Apparel, and Metro Wear are factories under the ownership of Sports City. We have addressed the layoffs at these factories in our letter to BHRRC dated 4th November 2022. To summarize, the factories complied with all legal requirements pertaining to the layoff process and the mandated severance payment. It is important to note that adidas ended its business relationship with these three factories in February 2024.
• Action Taken by adidas: adidas' SEA team closely monitored the layoff process and, as per our labor compliance policies, asked Sports City to disclose to us their redundancy plan in advance of any layoffs. We carefully reviewed all relevant documents, including the worker notification/communications plan and severance pay calculations, to ensure they fully met legal requirements and our Guidelines.

• Factory name: Jiaxing Quang Viet
• Country: China
• adidas Business Status: Active
• Allegation: In April 2023, it was reported that due to reduced orders at Jianxing Quang factory, working hours had dropped and workers' monthly salary had reduced
• Clarification on Allegation: At the time of the strike, the factory management convened a town hall meeting with all employees to clarify the monthly salary structure, which was fully compliant with legal requirements. They also discussed the current low volume of orders/business, but assured employees that the factory had secured additional orders from customers in the following month, i.e. May 2023, with increased working hours and subsequently an improvement in the workers’ take-home pay. The strike concluded peacefully, following these clarifications from the factory management.
• Action Taken by adidas: The strike was reported to adidas only after its resolution. adidas' SEA team investigated and verified the information provided by the factory to the workers. We checked and confirmed that workers’ take-home pay during the low order months (March and April 2025) had continued to meet legal requirements.

• Factory: Pou Yen Vietnam
• Country: Vietnam
• adidas Business Status: Active
• Allegation: In December 2022, it was reported that PouYuen Vietnam had asked 20,000 workers to take alternative Saturdays off for three months, due to plummeting business. It was later reported that in February 2023, PouYuen Vietnam had laid off more than 2,300 workers, and then dismissed more than 6,000 others in June, citing a lack of orders. These dismissals significantly impacted older workers, with 54% of dismissed workers in February being over 40 years old, and over 50% of workers dismissed in June being over 40 years old
• Clarification on Allegation: Prior to the implementation of alternative Saturdays off arrangement, Pou Yuen factory has provided clear communication to the local trade union and workers and secured agreement from them. It was confirmed that all impacted workers have been paid for their off days with at least minimum wage as per the law. Pou Yuen did not institute ""dismissals"" as stated in the allegation. It implemented a voluntary redundancy program for workers in facilities that produced for adidas. The program was transparently communicated to trade union and to the entire workforce, and as the result around 6000 workers participated in the program. Workers who accepted the voluntary redundancy received severance pay higher than the legal requirement. In such cases, it is not atypical for older workers to opt for voluntary redundancies, given the scale of the payout."
• Action Taken by adidas: In accordance with adidas’ labor compliance policies, Pou Yuen communicated both the ‘Saturdays off’ arrangement and the voluntary resignation program to adidas in advance for our review. adidas' SEA team closely monitored the implementation of the program and confirmed that it was executed in compliance with local legal regulations and adidas’ Guidelines. We also checked and confirmed that workers severance payments were higher than the legal requirement.

• Factory: PT Nikomas Gemiland
• Country: Indonesia
• adidas Business Status: Active
• Allegation: In June 2023, it was reported that PT Nikomas was laying off thousands of workers, amid reduced or non-existent buyer orders.
• Clarification on Allegation: In 2023, PT Nikomas initiated a voluntary redundancy program in which approximately 1,000 workers participated. Prior to the announcement and implementation of this program, the factory management engaged in consultations and secured endorsement from the plant level labor unions.
• Action Taken by adidas: Prior to its implementation, PT Nikomas disclosed and shared their voluntary redundancy program with the adidas' SEA team for our review. We closely monitored the implementation and confirmed that the voluntary redundancy program complied with local law and with adidas Guidelines.

• Factory: PT Panarub
• Country: Indonesia
• adidas Business Status: Active
• Allegation: In December 2022, it was reported that 300 workers at PT Panarub had been fired and another 1,500 workers were expected to be laid off. Workers allegedly only receive half of their owed severance. It was reported that post-covid conditions and the external economic crisis had triggered a reduction in orders
• Action Taken by adidas: A minority labor union at the factory lodged a complaint regarding the factory’s decision to layoff workers. adidas' SEA team had previously reviewed the factory’s layoff plan, which had been signed off by the majority unions. The results of this review were conveyed to the minority union, who raised no further questions or objections to the layoff process.