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Local industries cut staff, spending as global slowdown begins to hurt
Tens of thousands of jobs lost in West Java alone are a stark reminder that Indonesia is far from immune to global economic turmoil as exporters report plummeting orders from the United States and Europe.
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Women from the Solidaritas Perempuan group express their rejection of a fuel price hike during a protest in front of the legislative complex in Senayan, Jakarta, in March 2012. ( JP/P.J.Leo)
C
ompanies in many sectors have begun to lay off workers to stay afloat, a stark reminder that being one of the bright spots in the world for GDP growth this year does not make Indonesia immune to global economic turmoil.
Export-oriented industries are predictably among the hardest hit, with many reporting sales plunging 30 to 50 percent or even more, depending on their reliance on the overseas market.
Footwear and textile industries that depend heavily on the United States and European markets top the list, followed by rubber and food-and-beverage producers. The latter has also expressed concern over plans to impose a sugary drink tax next year, which could further reduce their sales.
Because of the bleak outlook, the domestic electronics industry is bracing for what it anticipates to be a 10 percent drop in sales next year.
Tens of thousands of workers have reportedly been dismissed across the country, and further cuts are expected.
The Manpower Ministry said at least 10,700 workers had been laid off nationwide during the first seven months of this year, but the Indonesian Employers Association (Apindo) reckons the figure is far higher.
“There have been at least 25,700 layoffs in the footwear industry alone. The number is way higher in the textile industry, not to mention other industries,” Anton J. Supit, who heads the Manpower and Social Security division at Apindo, told The Jakarta Post on Wednesday.
