Indonesia steps up efforts to curb wider layoffs in industry

hartono · Jun 29, 2026

Indonesia steps up efforts to curb wider layoffs in industry

File photo - Workers produce shoes at a factory in Tangerang, Banten, November 14, 2025. (ANTARA FOTO/Putra M. Akbar/bar.)

Jakarta (ANTARA) - The Indonesian government continues to implement various mitigation measures to prevent layoffs from spreading further across the industrial sector, Presidential Special Advisor for Manpower Affairs and Worker Welfare Said Iqbal said.

"We are currently pushing mitigation efforts across various companies to minimize layoffs as much as possible. Not all information circulating reflects the actual situation on the ground," Said said in a statement on Monday.

He cited the Yazaki Group as an example, where bipartite negotiations helped prevent a planned production relocation to Vietnam, allowing workforce reductions to be managed gradually through the natural expiration of employment contracts.

The government is also overseeing the settlement of labor cases involving Pakerin, Molex Ayus, and several other companies to ensure workers' rights are fulfilled.

Said said current pressure on businesses stems from multiple factors, including the conflict in the Middle East, weakening consumer purchasing power, the depreciation of the rupiah, and the relocation of investment to other countries.

"The Middle East conflict has driven up industrial fuel and non-subsidized gas prices. At the same time, weaker consumer purchasing power has reduced companies' production volumes," he said.

He added that the relocation of part of industrial production overseas and the weaker rupiah have also increased production costs.

"There are indeed many factors affecting the current condition of the industrial sector," he added.

Meanwhile, ReforMiner Institute Executive Director Komaidi Notonegoro said gas prices account for only one component of industrial production costs and should not be viewed as the sole cause of weakening competitiveness or rising layoff risks.

"The competitiveness of the national industry is determined by around 15 factors. Cost competitiveness through gas prices is only one component. Industrial strategy, market demand, and resource elements play much bigger roles," he said.

Citing 2025 Statistics Indonesia data, he said fuel costs, including gas, lubricants, and electricity, account for around 6.35 percent of industrial input costs, while raw and auxiliary materials make up between 64.60 percent and 96.76 percent, depending on the industry.

He therefore urged the government to strengthen industrial strategy, maintain market demand, improve supply-chain efficiency, and ensure adequate raw material supplies rather than relying solely on gas price adjustments to improve industrial competitiveness.

The remarks followed a statement by House Deputy Speaker Sufmi Dasco Ahmad last week that the parliament was prepared to mitigate the risk of layoffs affecting more than 50,000 workers at a ceramic factory in Bekasi, West Java, reportedly linked to rising industrial gas prices.