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View all search results9,000 layoffs may come within 3 months, labor union warns
One company that had fallen victim to the war was PT Xacti Indonesia, formerly known as Sanyo, which had been axing workers since last year due to financial hardships and was forced to close shop permanently this month.
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Stitch in time: Workers use machines to produce backpacks on June 14 in the factory of PT Eksonindo Multi Product Industry (EMPI) in Katapang, Bandung regency, West Java. The company employs 1,800 workers, who produce 3 million backpacks a year. (Antara/Raisan Al Farisi)
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labor union leader has warned that massive layoffs may occur in the next three months on account of skyrocketing production costs due to the Middle East conflict, forcing manufacturing companies across Java to downsize or close operations permanently.
Confederation of Indonesian Trade Unions (KSPI) president Said Iqbal said in a press conference on Monday that the cost-cutting measures could potentially affect 9,000 workers in 10 companies in Banten, West Java, Central Java and East Java.
“The driving factor is the war between Iran against the United States and Israel, which has no certainty over when it will end, causing prices of fuel to surge,” stated Said, who is also the chairman of the Labor Party.
The number was an approximation of the reports from the union members who were given early warning about the layoffs, he noted.
Said pointed out that the fuels the industry used were unsubsidized and that their prices started to increase in May. Thus, many companies will be forced to axe workers within the next three months, said the labor leader.
The companies also struggled with raw materials they had to import, which became more expensive not only because of rising international logistics costs due to the rising fuel price, but also a weakening rupiah against the US dollar.
International trade is mostly conducted in dollars but transactions in Indonesia are conducted in rupiah and when the latter weakens, the industry has to spend more just to import.
