According to a report by the Nusantara Confederation of Trade Unions (KSPN), a total of 126,160 workers in labor-intensive sectors were laid off (PHK) from 2024 to October 2025. Of this figure, 79% or 99,666 workers came from the textile, garment, and footwear industries, which remain the most severely affected sectors. The situation has raised concerns among productive-age groups who are currently employed or seeking work.
UGM labor expert from the Faculty of Social and Political Sciences (Fisipol UGM), Professor Tadjuddin Noer Effendi, noted that recent layoff trends have begun to decline. He stated that one contributing factor is the government’s tightened import policy issued by the Minister of Finance.
“Recently, with the breakthrough by the Minister of Finance banning the entry of used clothing and similar items, the trend has started to decline. In fact, we are beginning to see a turning point, especially among textile MSMEs,” he said on Wednesday (Nov. 19).
Professor Effendi explained that although national economic growth is improving on a modest scale, the change already signals better labor absorption.
The tightened import policy is also accompanied by strengthened oversight related to smuggling, customs, and restrictions on selected imported goods.
“There is also encouragement for MSMEs through bank-provided credit supported by a Rp200 trillion stimulus fund, with the hope that they can grow. This credit must not be given to conglomerates,” he said.
He added that a cleaner and more transparent fiscal direction has contributed to improved industrial stability.
“The direction is now relatively positive; economic developments are improving because long-standing corruption hotspots have begun to be dismantled through the Minister of Finance’s policies,” he noted.
According to Professor Effendi, many companies previously faced difficulty accessing credit, struggled with weak purchasing power, and experienced declining production capacity, triggering mass layoffs.
With recent improvements, he believes the optimistic 6% economic growth target for 2026 could boost job creation.
“If we achieve 6 percent growth, it will have a positive effect on employment creation,” he explained.
Professor Tadjuddin emphasized that although recovery is not occurring rapidly, current economic trends are moving in a more encouraging direction.
“The point is that our economic development trend is starting to move. Not rapidly, but it is moving as a result of the tightening measures and controls implemented by the Minister of Finance,” he concluded.
Author: Alena
Editor: Triya Andriyani
Post-editor: Lintang Andwyna
Illustration: Freepik