Indonesia Prepares Layoff Mitigation as Unions Warn 50,000 Jobs at Risk
Updated
Updated · AsiaNews · Jun 25
Indonesia Prepares Layoff Mitigation as Unions Warn 50,000 Jobs at Risk
2 articles · Updated · AsiaNews · Jun 25
Summary
More than 50,000 Indonesian workers could face layoffs in the second half of 2026, prompting the government to ready mitigation steps through the Manpower Ministry and parliament.
Labour groups tied the threat to weaker exports, higher production and imported raw-material costs, soaring industrial gas prices, rupiah volatility and wider global economic uncertainty.
Textiles, footwear, electronics, ceramics and auto components are among the most exposed sectors; unions said PT Pakerin could cut about 2,500 jobs and PT Feng Tay has already laid off roughly 4,000.
Japanese-linked auto-parts makers in East Java are also under pressure as principals weigh shifting some production to countries including Vietnam during the industry's transition to electric vehicles.
Officials are discussing labour-intensive job programs, easier access to Job Loss Insurance and tighter coordination with local governments, employers and unions, while labour groups also demand stronger curbs on illegal imports and full severance payments.
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.