Indonesian Unions Warn 50,000 Layoffs as Weak Exports and Gas Prices Squeeze Factories
Updated
Updated · AsiaNews · Jun 25
Indonesian Unions Warn 50,000 Layoffs as Weak Exports and Gas Prices Squeeze Factories
1 articles · Updated · AsiaNews · Jun 25
Summary
More than 50,000 Indonesian workers could lose their jobs in the second half of 2026, trade unions said, with labor-intensive sectors such as textiles, footwear, electronics, auto parts and ceramics most exposed.
Soaring industrial gas prices, weaker exports, costlier imported raw materials, rupiah-dollar swings, rising imports and wider global uncertainty are driving the threat, unions said, hitting export-oriented manufacturers especially hard.
PT Pakerin in Mojokerto may cut about 2,500 jobs after most operations halted, while PT Feng Tay in West Java has already laid off roughly 4,000 from a workforce of 14,000 to 17,000.
Automotive component plants in Pasuruan and Mojokerto also face pressure as Japanese principals consider shifting some production to countries including Vietnam during the industry's move toward electric vehicles.
Indonesia's government is preparing mitigation steps including expanded labor-intensive programs, easier Job Loss Insurance access and tighter coordination with regions, while unions want stronger action against illegal imports and on severance compliance.
Will Indonesia's safety nets hold under the weight of a looming mass layoff crisis?
With 50,000 jobs at risk, can Indonesia's government fix the economic pressures fueling this crisis?
As key industries eye relocation to Vietnam, can Indonesia prevent a mass manufacturing exodus?
Indonesia Faces 70,000+ Manufacturing Layoffs in 2026: Global Disruptions, Domestic Pressures, and Policy Responses
Overview
In mid-2026, Indonesia’s manufacturing sector faces a major employment crisis, with widespread layoffs causing economic strain for workers and regional economies. The automotive component industry is hit especially hard, as Japanese principals consider relocating production to countries like Vietnam, driven by the global shift toward electric vehicles. This threatens thousands of jobs and intensifies the crisis. The layoffs are not only extensive but also seen as harsh and targeted, raising concerns about union busting. These developments highlight deep challenges for Indonesia’s industrial base, with significant social and economic impacts across the country.