Get Ready, Wave of Mass Layoff Continues

The Indonesian Employers Association (Apindo) stated that three types of industries may face mass layoffs in 2023 due to significantly lower market demand. Apindo Vice Chairwoman Shinta Widjaja Kamdani said the three industries that will conduct mass layoffs are the textile, footwear, and furniture industries. All three are labor-intensive and export-oriented industries.

"There will be layoffs next year," Shinta told Katadata.co.id at Apindo Office, Jakarta, Wednesday. The three industries have carried out layoffs this year. BPJS Ketenagakerjaan noted that there had been layoffs of 919,071 workers who cashed out Old Age Security or JHT funds due to layoffs this year through Nov 1.

According to Shinta, the wave of mass layoffs will be even higher next year as market demand for export goods is declining. Based on Apindo's records, labor-intensive industries such as Textile and Textile Products (TPT) and footwear have faced a decline in global market demand since the beginning of the second half of 2022, particularly from developed countries.

"In the textile and footwear industry, there was a 30-50 percent decrease in orders for delivery from the end of 2022 to the first quarter of 2023," she said. Thus, these conditions forced companies in the sector to reduce production significantly and led to a reduction in working hours and layoffs.