A large ready-made garment factory in Ashulia, on the outskirts of Dhaka, employed about 16,000 workers in 2021. Its workforce has since fallen to 13,500 — a reduction of 2,500 jobs in five years. Yet output has not declined. Production capacity has expanded, with fewer workers producing more goods than before. Artificial intelligence (AI), robotic systems and other automation technologies are driving the shift.

The factory is not an isolated case. Production methods are changing across Bangladesh’s industrial sector, particularly in large industrial sectors such as ready-made garments and textiles. Manufacturers are adopting modern machinery, automated production systems and digital technology, boosting productivity and competitiveness while reducing the number of workers needed to produce the same volume.

That trend is raising questions about the government’s plan to create 10 million jobs over the next five years. Economists and other stakeholders are particularly sceptical that the industrial sector can meet its share of the target.

The government has adopted a five-year plan to accelerate economic growth, curb inflation, increase investment and create jobs. Titled the “Five-Year Strategic Framework for Reform and Development”, it will run from July 2026 to June 2031. Prepared by the General Economics Division (GED) of the planning ministry, the framework targets 10 million new jobs over the period, alongside an ambition to transform Bangladesh into a $1 trillion economy by 2034.

The industrial sector is expected to account for about 3.32 million of those jobs, including 2.28 million in manufacturing and 1.04 million in construction and other industries. The sector will therefore be central to delivering the government’s employment target.

Textiles and ready-made garments remain the two main pillars of Bangladesh’s industrial sector. While textiles are relatively capital-intensive, RMG has long been the country’s most labour-intensive industry, employing millions, generating export earnings and bringing in vital foreign exchange.

But the need to stay globally competitive, lower production costs, shorten delivery times and maintain quality is driving rapid technology adoption across the RMG industry. Automated cutting machines, digital pattern-making, robotic systems, AI-powered production planning and automated quality control are allowing factories to perform more tasks with fewer workers. Employment is consequently failing to keep pace with rising output and the overall workforce is shrinking, according to industry insiders.

“There’s no significant new job creation in the RMG sector. On the contrary, the workforce is shrinking — falling sharply over the past five years. Our company had 16,000 workers; now we have 13,500,” Inamul Haq Khan, senior vice-president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told Bonik Barta.

He added: “The use of AI technology in this sector is growing. All our machinery is AI-enabled. And everything is automated in our offices. Because of this, office headcount is also shrinking. But production hasn’t declined; in fact, it has increased. Medium and large-scale factories are using technology. Not everyone is using it, because it’s expensive. But those who are using it are finding that they need fewer people.”

A broader paradox is emerging in Bangladesh’s labour market. The services sector is expanding rapidly, yet large numbers of highly educated young people remain unemployed year after year. Analysts say economic and service-sector growth is failing to generate jobs at the expected rate.

The latest Labour Force Survey by the Bangladesh Bureau of Statistics (BBS) puts total unemployment at 2.62 million, including nearly 885,000 people with higher education. Many educated young people remain out of work for extended periods because suitable opportunities are scarce even after graduation. Universities and other higher education institutions continue to add large numbers of graduates each year, preventing educated unemployment from falling and compounding pressure on the job market.

Experts stress that the employment challenge will become harder to tackle as the gap widens between what the education system produces and what employers require. Creating jobs alone will not be enough; the skills those jobs require must also match the qualifications of jobseekers.

Dr Monzur Hossain, member (secretary) of the General Economics Division of the planning ministry, told Bonik Barta: “The industries being developed in the country are still labour-intensive, particularly ready-made garments. Technology adoption and investment haven’t reached other industries to the same extent. We estimate that demand for labour will be higher in the services sector in future because it is large and still needs many workers. Moreover, we haven’t yet reached the stage where new technology will sharply reduce the need for labour.”

“Adjusting to industrialisation is more important for us. It’s difficult to say what will happen over the next five years. At the moment, there may be an energy crisis or other problems. But these won’t last forever. If the economy turns around, what we call the recovery stage, there will be significant scope to create jobs,” he added.

Asked about building a skilled workforce, Hossain said employment would not increase overnight and that the wider ecosystem needed to improve.

He said: “We need to increase both employment and demand for workers. When demand for workers rises, employment will rise as well. We must also improve skills through skills development, upskilling and reskilling. The framework prioritises these issues.”

Meanwhile, the services sector continues to expand and account for a growing share of the economy. Bangladesh Bank data show that the sector reached BDT 32.06 trillion in the 2025–26 fiscal year, up from BDT 28.75 trillion in FY 2024-25 — an 11.5 percent increase in a single year.

The strategic framework therefore places the greatest emphasis on the services sector for job creation, targeting 5.87 million new jobs in the sector over the next five years.

The sector’s expanding footprint, however, has not necessarily translated into decent working conditions. Bangladesh has more than 20 services sub-sectors including education, health, banking, insurance, financial institutions, transport and communications, hotels and restaurants, housing and real estate. Transport and communications, alongside hotels and restaurants, employ the largest numbers of workers.

According to the National Economic Census 2024, the transport and storage sector alone employs 3,033,168 people. Yet much of this employment remains informal. Many workers have no job security, appointment letters or fixed pay scales. Social protection is limited, and labour law violations are reported across the sector. Informal hiring, irregular practices and weak enforcement of workers’ rights leave much of the service workforce in precarious conditions, with injured workers often receiving little financial support or access to a social safety net.

Industry stakeholders say unlocking the transport sector’s employment potential and transforming it into sustainable, decent work will require sweeping reforms. This includes establishing an organised institutional framework with guaranteed pay structures, health and accident insurance, formal hiring protocols and social security provisions. Regular training is also required to upgrade the skills of drivers, assistants and support staff.

Dr Fahmida Khatun, executive director of the Centre for Policy Dialogue (CPD), who will become a distinguished fellow from September 1, told Bonik Barta: “The government’s strategy paper mainly sets out broad directions. It should have identified the problems more clearly, because those domestic and external realities will come to the fore when the government moves to implement the plan.”

“More than 50 percent of our economy is now dependent on the services sector. There are many informal and small sub-sectors but they haven’t yet grown large enough to make a substantial contribution to the economy. Expanding these sectors will require investment, including large-scale domestic and foreign investment. This is critical if we want to generate more employment in services. At the same time, those already working in this sector will need training to improve their skills,” she added.

Education represents another major service sub-sector. But employment opportunities have failed to keep pace with educational expansion, making graduate unemployment an increasingly serious challenge. Experts argue that job creation must become a central economic policy priority if Bangladesh is to provide work for its unemployed population.

Expanding industry, attracting domestic and foreign investment, and using technology productively will be essential, experts say. But Bangladesh’s current economic conditions have yet to put those conditions firmly in place.

Large numbers of young people enter the job market each year after completing higher education, but a shortage of suitable employment leaves many unemployed for years. This growing pool of educated jobseekers is becoming an increasingly serious challenge for Bangladesh’s labour market and wider economy.

Many also enter the labour force after completing their studies at institutions under the Technical Education Board, the Madrasah Education Board and Qawmi madrasahs. Yet their education and skills often do not match the demands of the mainstream job market, leaving most unable to secure formal employment beyond a handful of specialised sectors.

Under the International Labour Organization’s standard definition, anyone who worked even a single paid hour in the reference week is classified as employed, while those who sought work over the previous month but did not work are counted as unemployed.

That definition is open to question in Bangladesh. No one can sustain a livelihood or cover basic household expenses by working just one hour a week. As a result, official statistics may show a relatively small unemployed population even though far more people lack adequate or suitable work, leaving many effectively underemployed or in disguised unemployment.

Nearly 10 million people in Bangladesh cannot find their preferred work or enough work to make a living. They are employed in some capacity, but their work is inadequate, their income is uncertain and their earnings do not cover the cost of living. Falling outside the formal unemployment count, this large group points to a deeper crisis in the labour market.

A range of economic pressures is placing further strain on employment. An ILO working paper published in March said Bangladesh was grappling with high inflation, the transition out of least developed country status and other economic headwinds. Although employment is growing in agriculture and the informal sector, the report found that these gains are not being reflected in workers’ living standards across the board. Real wages are falling under inflationary pressure, while structural problems such as youth and female unemployment are becoming more acute.

Agriculture currently employs nearly 30.85 million people in Bangladesh. Under the government’s plan, that figure is expected to rise to 31.44 million over the next five years, implying the creation of about 590,000 new jobs in the sector.

Agricultural experts, however, warn that numerical targets alone will not expand employment in agriculture. The nature of work in the sector is changing rapidly as modern technology, commercialisation, agri-entrepreneurship and a more investment-friendly climate reshape farming. Alongside traditional farm labour, many educated young people are moving into agricultural processing, supply chains, produce marketing and agri-tech. The government therefore needs to look beyond simply adding workers to the sector, focusing instead on skills development, technology-driven agriculture, processing industries and stronger market systems.

Government and agriculture-related data show that male participation in farming is steadily declining. As more men leave agriculture for jobs in other sectors, women are filling the gap. About 74 percent of Bangladesh’s female labour force is engaged in farm work, according to BBS data, making women increasingly central to any strategy for agricultural employment. But without fair wages, social security, recognition of skills and access to formal employment, the benefits of job growth in agriculture will remain limited.

The government’s new strategic framework also calls for a gradual shift of informal workers into the formal economy over the next five years. Experts say that transition will be extremely difficult given the sheer size of Bangladesh’s informal labour market.

Three-wheeler transport has been one of the country’s largest sources of informal employment in recent years, with millions earning a living from auto-rickshaws, easybikes and vans. While there is no reliable official count of the workforce, at least two state-owned institutions estimate that between 4 million and 4.5 million people work in the sector.

Millions of people in Dhaka and other cities depend on three-wheelers for their livelihoods. Yet much of the sector operates outside a clear policy or regulatory framework, with no coordinated system governing where these vehicles can operate, which roads they can use or what training and registration drivers should receive.

Experts say bringing the sector into the formal services economy will require clear rules, effective enforcement, designated routes and the registration of both drivers and vehicles. They also stress the sector should be brought into the tax system, and drivers should receive regular training and skills development.

Informal employment accounts for about 84 percent of all jobs in Bangladesh, with the share higher among women than men. Bringing these workers into the formal economy while ensuring social security, fair wages and recognition of their skills is therefore a major challenge for the government.

Under the new plan, the government aims to raise labour force participation among educated young people and women by 8 to 10 percent. Labour market specialists say the target will not deliver its intended benefits unless improvements in job quality, incomes and social protection accompany any increase in employment.

The government also has ambitious plans to expand overseas employment. Although migration is not included in the headline target of 10 million new jobs, the strategic framework treats overseas employment as a separate priority. The government aims to send an additional 460,000 workers abroad each year on top of current flows, creating overseas jobs for about 2.3 million people over the next five years.

Bangladesh currently sends an average of about 1.12 million workers abroad each year. The government’s plan aims to raise that to 1.58 million from the current 2026–27 fiscal year.

Irregular and illegal migration poses the biggest obstacle to expanding overseas employment. Large numbers of Bangladeshis seeking work try to travel abroad through brokers and risky routes, including by sea and other irregular channels, damaging Bangladesh’s standing in key labour markets and creating new barriers to recruitment. Many Bangladeshis are detained abroad each year on illegal migration charges and sent back. Opportunities for Bangladeshi workers abroad are also narrowing for the same reason.

Malaysia, one of Bangladesh’s most important labour markets in Southeast Asia, has long been a source of friction over worker recruitment. Irregularities in recruitment, labour abuse and alleged syndicates have kept the market mired in unresolved problems. The former interim government held repeated talks with its Malaysian counterparts, but the issues were not fully resolved.

The BNP-led government has now launched a fresh effort to ease access for Bangladeshi workers to Malaysia. Even so, migration specialists say the target of creating an additional 460,000 overseas jobs is challenging and may be unrealistic.

“Several major Middle Eastern markets including the UAE are closed. The Malaysian labour market has only just begun to reopen. Given all this, how realistic is it to send 1.5 million workers is a big question,” Professor Tasneem Siddiqui, founder of the Refugee and Migratory Movements Research Unit, told Bonik Barta.

She added: “Most of those currently going abroad are unskilled. Demand in international labour markets is now highest for skilled workers. Targets can be set, but achieving them depends on many other conditions. If we are talking about skills, Bangladesh needs to build a stronger position in the international labour market. That means producing more skilled workers, reducing unskilled migration and addressing the exploitation of unskilled workers.”

Senior officials at the Bangladesh Institute of Development Studies (BIDS) say the economy could create 10 million jobs if growth reaches 6 percent, but that will depend on domestic and foreign investment.

BIDS Director General Dr AK Enamul Haque told Bonik Barta: “To create 10 million jobs, the government needs a clear action plan. Normally, when our economy grows above 4.5 percent, about 1 million to 1.1 million jobs are created a year. If growth rises to 6 percent, 10 million jobs can be created. But ultimately, it depends on where investment is going in the economy. Without the necessary investment, employment won’t grow. The public sector alone can’t generate this many jobs.”