The Indonesian Ministry of Manpower announced that approximately 80,000 people experienced layoffs throughout 2024.
This number increased compared to the previous year, with around 60,000 people laid off.
UGM Faculty of Social and Political Sciences (Fisipol UGM) lecturer in Social Development and Welfare, Dr. Hempri Suyatna, mentioned that several factors, including the impact of the global economic downturn and the influx of imported products, caused the rise in layoffs.
“I believe this (increase in layoffs) is a result of the weakening global economy and the flood of imported products into Indonesia,” explained Dr. Suyatna on Tuesday (Dec. 24).
He noted that the Ministry of Trade Regulation (Permendag) Number 8 of 2024 concerning Import Policies and Regulations is suspected of causing the influx of imported products, which has led to a sluggish domestic industry.
The lack of strict government control over imports has worsened the situation. Due to deindustrialization, local companies are struggling and facing additional challenges.
“If we look at it, the most affected industries are labor-intensive, particularly the footwear industry,” he added.
As a result, companies resort to layoffs as a strategy to improve operational efficiency. However, the increase in layoff data must be monitored carefully, and the government needs to implement measures to prevent the negative impacts of layoffs from spreading further.
Dr. Suyatna explained that layoffs affect workers by causing job loss and can also have psychological consequences. Moreover, they can trigger various social problems, such as increased poverty, social instability, and a decline in economic growth.
According to him, these impacts require an immediate response from the government.
In light of the wave of layoffs, Dr. Suyatna stated that workers must be aware of legal issues, particularly regarding the fulfillment of workers’ rights.
Dr. Suyatna hopes that layoffs are taken seriously so that this labor problem does not persist. He suggested revisiting Permendag Number 8 of 2024 as one way to address the issue.
Additionally, strengthening the MSME and informal sectors is necessary so they can absorb those affected by layoffs and expand labor market information to provide job opportunities for those impacted.
Author: Lazuardi
Editor: Gusti Grehenson
Post-editor: Afif
Photo: Freepik