By: Firman Subagyo )*
The government continues to demonstrate its commitment to maintaining employment stability amidst various global economic challenges. Various policies have been implemented to protect workers from the threat of layoffs and to ensure that worker welfare is maintained. Strategic and synergistic steps from the government are the main key in dealing with increasingly complex employment dynamics.
M. Rizal Taufiqurrahman, Head of the INDEF Macroeconomics and Finance Center, emphasized the need for strategic steps to prevent an escalation of layoffs. He suggested providing incentives to affected industries, encouraging product diversification for the domestic and export markets, and strengthening workforce capacity through professional training.
“The government needs to take strategic steps to prevent an escalation of layoffs, such as providing incentives to affected industries, encouraging product diversification for the domestic and export markets, and strengthening workforce capacity through professional training,” said M. Rizal Taufiqurrahman when contacted in Jakarta.
He noted several main factors causing layoffs in the manufacturing industry, including company bankruptcy, business disruption, inefficient production costs, and declining market demand. Real examples are mass layoffs involving more than 10,000 workers and the closure of factories by Yamaha Music Products Asia which relocated production to other countries. With strategic and collaborative steps, it is hoped that the challenges of layoffs in the manufacturing sector can be overcome, so that economic stability and worker welfare are maintained.
Meanwhile, the Deputy for Community Empowerment, Population, and Manpower of the Ministry of PPN/Bappenas, Maliki, said that the government continues to strive to provide certainty of broader protection for workers who are laid off.
“To respond to the current global economic challenges, the government continues to strive to provide certainty of broader protection for workers/laborers who are laid off,” he said.
Since 2022, the government has been running the Job Loss Guarantee (JKP) program which provides benefits in the form of cash, access to job training, and labor market information services for workers affected by layoffs. This program continues to be updated and its benefits are improved, including through Government Regulation (PP) Number 6 of 2025 concerning amendments to PP 37/2021.
“The JKP program is fully funded by the government without burdening workers, with a contribution of 0.22 percent of monthly wages (upper limit of wages of IDR 5 million) and a recomposition of the Work Accident Insurance Program (JKK) of 0.14 percent,” explained Maliki.
Through this program, workers affected by layoffs are entitled to receive cash of 60 percent of their wages for six months, as well as vocational training support to improve their skills so that they are better prepared to compete in the job market.
Recently, the rampant layoffs have been caused by various factors, such as the economic slowdown that has suppressed demand for goods and services, as well as global competition in the textile and textile product sector. Many textile companies face serious challenges due to production machines that are more than 20 years old, making the prices of their products less competitive compared to products from China. External factors such as illegal imports, the development of thrifting, and the ease of buying foreign products online have also contributed to the pressure on the local industry.
According to Maliki, the main reason for layoffs in early 2025 was dominated by the cessation of company operations due to bankruptcy, with a total of 13,204 cases. In addition, declining financial conditions due to high wage burdens caused 4,461 cases of layoffs. Relocation of factories to other more competitive countries was also another major factor.
“The number of layoffs is quite worrying. Labor-intensive investment in the textile and textile product sector is needed to reduce the impact of layoffs, especially in areas with high layoff cases,” he added.
To overcome this challenge, in the 2025 Government Work Plan (RKP) and the 2025-2029 National Medium-Term Development Plan (RPJMN), the government has set a number of national priorities to create a conducive employment climate. Several strategic steps that have been taken include strengthening industrial relations mediation skills, coaching workers to be skilled in negotiating with companies, and increasing the capacity of industrial relations mediators. In addition, the government also continues to intensify the socialization of the JKP program so that more workers understand and can access its benefits.
In addition to ensuring protection for workers affected by layoffs, the government is also focusing on efforts to improve workforce skills. Through the Ministry of Manpower’s labor market information system (SIAPKerja), workers who lose their jobs can take skills training, get job vacancy information, and consult on job opportunities.
their career development. This program is supported by the Manpower Office at the provincial and regional levels to ensure that every worker has easy access to employment services.
In addition, the policy of simplifying the business licensing system is also a strategic step to attract more new investment into the country. With the investment that comes in, it is hoped that more jobs can be created that can absorb workers affected by layoffs, so that the welfare of the workforce remains guaranteed.
With various policies and programs that have been designed, the government shows its seriousness in maintaining employment stability in Indonesia. Through synergy between social protection policies, vocational training, and incentives for industry, it is hoped that the negative impacts of layoffs can be minimized as much as possible, while creating new, more sustainable job opportunities.
By: The author is a Public Policy Observer