11 firms to dismiss 10,000 employees

Ridwan Max Sijabat ,  The Jakarta Post ,  Surabaya   |  Mon, 12/22/2008 11:06 AM  |  East Java

Eleven companies in the province are seeking official permits to dismiss a total of more than 10,000 workers in the near future due to the global economic slowdown, according to a local government official.

Deputy head of the provincial Manpower and Transmigration Agency Setiajid declined to identify the companies but said they operated in Surabaya, Sidoarjo, Mojokerto, Gresik, Pasuruan, Probolinggo and Nganjuk and had filed for permits to the local manpower agency.

He gave the global economic slowdown as the main reason behind the proposed mass labor dismissals, due to contracting domestic and foreign markets, weakening purchasing power and the sharp decline in orders from the United States.

"The companies decided to seek permits from the government following deadlock at the bipartite level," he said.

Setiajid revealed that four labor-intensive manufacturing industries in Sidoarjo dismissed a total of 2,300 workers recently for financial reasons after their requests to do so were accepted by the local regency administration.

"Labor authorities will continue to approach companies to avoid dismissing workers when this will raise serious social problems." he said.

He added that a garment factory PT Arta Glory Buana employing more than 1,300 workers in Sidoarjo had stopped operation without any provision for compensation for loss of jobs.

Meanwhile, Chairman of the provincial chapter of the Indonesian Employers' Association (Apindo) Alim Markus denied there were planned mass labor dismissals, saying that only a few companies had proposed to lay off hundreds of workers.

"(It's) not true. It will raise public unrest. Only a few companies are considering to lay off labor because they are waiting for orders from the United States," he said on Thursday.

Chairman of the provincial chapter of the Indonesian Footwear Manufacturer Association Sutan RP Siregar concurred, saying that none of the 125,000 workers employed in the subsector were facing dismissal in an immediate future.

He admitted the global financial crisis was expected to result in negative impacts in January and many manufacturing industries exporting to the U.S. were in a wait and see position because they had yet to receive orders for 2009.

"But, those exporting their products to Asia, Australia, Europe and South Africa have no major problems and will likely survive the crisis," he said.

He called on workers to avoid anarchistic labor actions that could disturb the conducive investment climate, saying they would lose their jobs if foreign investors moved to other countries.

Apindo Chairman Sofjan Wanandi said in Jakarta that labor layoffs and dismissals would be the last resort for employers to survive the global economic slowdown expected to take its effect in the country next year.

Setiajid also said both provincial government and regency and municipal administrations would spend part of their 2009 budgets to carry out infrastructure or rehabilitation projects to generate job opportunities for workers who lost their jobs and to help ease the unemployment rate which had already reached 11 percent in the province.

"Besides, the government has encouraged the growth of small-scale enterprises and microfinance businesses in the informal sector which were also expected to help cope with the unemployment problem," he added.

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