Jakarta alarmed by 12 thousand layoffs in February

The island of Java is the most affected, where there has been a significant impact on the production sector. Among the companies in crisis is the clothing giant PT Sritex, with about 11 thousand layoffs in various departments and the non-payment of compensation since last August. The government is promising action but the 5% growth target for the first quarter of 2025 could be missed.

Jakarta (AsiaNews) - In recent weeks, Indonesia has seen a massive wave of group layoffs, with more than 12,000 workers suddenly losing their jobs in various sectors of industry across the archipelago. However, the first and most affected at the moment appears to be the island of Java, with two regions accounting for the highest number of redundancies and a more significant impact on the production fabric.

In central Java, the clothing giant PT Sritex, based in Sukoharjo, has officially announced mass layoffs, resulting in the loss of jobs for around 11,000 workers. In a similar move, in West Java, the electrical equipment manufacturer Sanken, based in Karawang, has ceased operations, causing further declines in employment. In addition, the Yamaha Music factory in Bekasi, also in West Java, has ceased operations, leaving at least 1,100 workers without a salary.

PT Sritex, a renowned clothing company known for producing military uniforms for the national and international market, has long been considered an icon and a cornerstone of the Indonesian textile industry. Management closed the business on 1 March, resulting in a total of 10,965 layoffs at its subsidiaries.

A letter from the management team detailed the number of workers affected, including: PT Bitratex Semarang, with 1,065 layoffs (starting in January 2025) and an additional 104 in February 2025; PT Sritex Sukoharjo, with 8,504 layoffs; PT Primayudha Boyolali, with 956 layoffs; PT Sinar Pantja Jaya Semarang, with 40 layoffs; PT Sinar Pantja Jaya (another division), with 300 layoffs. Moreover, there is no evidence of severance pay being paid since August 2024 and no change is expected in the immediate future.

In response to the crisis, Indonesia's Deputy Minister of Labour, Immanuel Ebenezer, has assured the government's commitment to protecting workers' rights. Moreover, despite the mass layoffs, S&P Global has seen an increase in manufacturing activity in the country. The Purchasing Managers' Index (PMI) rose to 53.6 in February 2025, up from 51.9 the previous month, marking the highest level in 11 months. The report indicates that the manufacturing sector has seen strong growth in new orders, production, raw material purchases and hiring.

However, experts warn that the PMI does not fully reflect the conditions of labour-intensive industries, where layoffs and factory closures are still prevalent and the crisis evident. Because while capital-intensive industries - such as metal processing and refining - are growing, many labour-dependent companies are in serious trouble. The Indonesian Central Statistics Agency (BPS) reported a decline in the consumer price index (CPI) from 105.99 in January to 105.48 in February 2025, indicating deflation of 0.48% on a monthly basis.

On an annual basis, deflation stood at 0.09%, while deflation recorded since the beginning of the year is 1.24%. The main factors are said to be reductions in the costs of housing, water, electricity and household fuels, which have decreased by 3.59%, mainly thanks to discounts on electricity tariffs, which accounted for a 0.67% decrease in inflation. With continued layoffs in labour-intensive sectors, government budget constraints and the expiry of electricity tariff incentives in February 2025, Indonesian household consumption is expected to slow down. These factors could make it difficult for the national economy to reach a set growth rate of 5% in the first quarter of 2025.