This paper studies structural changes in the Vietnamese economy during the reform era, with emphasis on the role of the manufacturing sector in employment generation. A stage-setting survey of analytical framework and empirical evidence of employment transformation in a laborabundant economy in East Asia has enabled a statistical analysis of employment transformation in Vietnam over the two recent decades. The findings suggest that the manufacturing sector has shown an improved performance in attracting massive amounts of unskilled workers from agriculture. Within manufacturing, the private sector firms, in particular the foreign-invested enterprises, have been increasingly responsible for job creation, contributing to the gradual erosion of the dominant state enterprises.