JAKARTA: As layoff figures continue to rise, the government has acknowledged that the trend is “difficult to avoid” amid mounting global economic pressures.
Nevertheless, labour unions are calling for immediate government intervention to help distressed companies stay afloat and protect jobs, while experts argue that the crisis exposes deeper structural problems that require long-term reforms to improve the business environment.
According to the Manpower Ministry’s Satu Data Kemnaker platform, Indonesia recorded 32,389 layoffs in the first half of this year, with nearly one-fifth of the job losses occurring in West Java.
Monthly layoffs consistently exceeded 5,000 workers during the first four months of the year.
The ministry noted that the figures cover only workers registered as participants in the Job Loss Insurance programme, while labour unions said the actual number of layoffs is likely higher.
In response, President Prabowo Subianto established the Layoff Mitigation Task Force in May to anticipate a broader wave of job cuts, while also outlining several immediate measures to cushion the impact of layoffs.
The Confederation of Indonesian Trade Unions president Said Iqbal, who also serves as the president’s special adviser on labour affairs, said the priority was to prevent layoffs wherever possible.
“If the company can still be saved, then it should be saved. If government policy intervention is needed, the state must step in. Businesses must be allowed to continue operating, while workers must also be protected from layoffs,” Said Iqbal said following reports of potential layoffs at two garment and textile manufacturers in Central Java that could affect nearly 1,500 workers.
Before companies resort to mass layoffs, the government and labour unions plan to explore alternatives including shorter working hours, operational cost efficiencies agreed with unions, policy interventions to address energy and raw material costs and temporary furloughs where feasible.
Deputy Manpower Minister Afriansyah Noor acknowledged that layoffs remain difficult to avoid amid global economic pressures but said companies are still required to fulfill workers’ legal rights.
The ministry is also preparing reskilling programmes for affected workers, with around 50,000 training slots available this year.
“It is not only Indonesia. Other countries, including China and even the United States, are experiencing similar challenges,” Afriansyah said, as quoted by Kompas, noting that the government was seeking to strike a balance between protecting workers and ensuring business continuity to maintain a conducive investment climate.
Finance Minister Purbaya Yudhi Sadewa, however, argued that layoffs should be viewed within the broader context of the labour market, arguing that business closures and layoffs are a normal feature of a competitive economy and stressed that the more important indicator is whether new jobs continued to outpace job losses.
“We will continue monitoring the situation. That is why the government is rolling out various economic stimulus measures to help the economy grow faster.
“If economic growth slows, layoffs will outnumber the creation of new companies and new jobs,” he said, as quoted by Kompas.com.
Deni Friawan, a researcher at the Centre for Strategic and International Studies, said while rapid intervention was necessary to prevent companies from collapsing, sustainable layoff prevention depended on creating a more predictable and competitive business environment.
“Preventing layoffs sustainably requires policies that work together to create a conducive business environment,” Deni said. — The Jakarta Post/ANN
