The study tried to examine how low labor productivity affects company'srninternational competitiveness. This is exemplified by taking a case study on AdeirnAbeba Yarn Share Company; the paper also indicated how the labor productivityrnfactors worsening company's performance and thereby affected Ethiopian textilernCompetitiveness.rnLabor productivity factors, which directly affect the company competitiveness,rnare poor working condition, no incentive system, employee-employer relationshiprnis not good and inadequate for maximizing employees' productivity, employees'rnab5enteeism, and inadequate training facility in the company. DemographicrnCharacteristics are other factors that indirectly affect labor productivity; thesernfactors are family size, marital status, work experience and employees housingrn/living place of employees/ and other factors are considered in the study. Forrnexample, if an employee with large family size is less productive than who hasrnsmall family size.