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Unions decry manufacturing layoffs
Indonesian factories have laid off almost as many workers in the first two months of this year as in all of 2024, a labor union says, but the government counters that newly created jobs make up for the ones lost.
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Employees of textile giant PT Sri Rejeki Isman (Sritex) listen to a speech from the company's board of directors at its factory in Sukoharjo, Central Java, on Feb. 28, 2025. Sritex ceased operations on March 1 after being declared bankrupt by the Semarang Commercial Court. (Antara/Mohammad Ayudha)
L
abor unions have raised the alarm over layoffs across a wide range of industries in the manufacturing sector, blaming weakening spending power, supply chain problems and a lack of business competitiveness.
Data compiled by the Confederation of Indonesian Trade Unions (KSPI) and unveiled on Sunday reveal that around 60,000 workers at 50 unionized companies lost their jobs in the first two months of the year, based on reports from the union’s regional branches.
KSPI chairman Said Iqbal told The Jakarta Post on Monday that the axing was due to bankruptcy, downsizing or relocation. He said the figure could reach “as high as 150,000” in July.
The union leader mentioned “government policy factors, high excise and logistics costs” alongside “taxes that are sometimes uncertain” as some of the key factors behind the layoffs, before adding: “Don’t just blame the workers”.
Some 60,000 layoffs in just the first two months was huge, given that this was similar to the number of layoffs during all of last year, he added, citing Manpower Ministry data.
The ministry figures seen by the Post show 77,965 layoffs for all of 2024, up from 64,855 in 2023 and 25,114 workers in 2022.
Out of the 50 companies, two textile manufacturers, PT Karyamitra Budisentosa and PT Sri Rejeki Isman, better known as Sritex and whose bankruptcy became a national issue recently, were responsible for about 10,000 layoffs each.
