More than 12,000 layoffs in February

The most affected is the island of Java, where there is an important impact on the productive fabric. Among the companies in crisis is the giant of the PT Sritex clothing, with about 11 thousand layoffs in several departments and the non -payment of benefits since last August. The Government promises to take measures, but could fail the 5% growth objective for the first quarter of 2025.

Yakarta (Asianews) – Indonesia has witnessed a massive wave of collective layoffs in recent weeks, with more than 12,000 workers who have suddenly lost their jobs in various industrial sectors throughout the archipelago. However, the first and most affected by the moment is the island of Java, with two regions that record the greatest number of layoffs and the most significant impact on the productive fabric.

In Java Central, the giant of the PT Sritex preparation, based in Sukoharjo, officially announced mass dismissals, with the consequent loss of employment for some 11,000 workers. To a similar extent, in the Western Java, the manufacturer of SANKEN electrical equipment, based in Karawang, ceased its activity, causing a new decrease in employment. In addition, the Yamaha Music factory of Bekasi, also in Western Java, ceased its activity, leaving at least 1,100 workers without salary.

PT Sritex, renowned clothing company known for producing military uniforms for national and international markets, has long been considered an icon and an cornerstone of the Indonesian textile industry. The management closed its operations on March 1, which caused a total of 10,965 layoffs in its subsidiaries.

In a letter from the management team, the number of workers affected was detailed, including: PT Bitratex SEMARANG, with 1,065 layoffs (as of January 2025) and another 104 in February 2025; PT Sritex Sukoharjo, with 8,504 layoffs; PT Primayudha Boyolali, with 956 layoffs; PT Sinar Pantja Jaya SEMARANG, with 40 layoffs; PT Sinar Pantja Jaya (another division), with 300 layoffs. In addition, there have been no compensation for dismissal since August 2024, and no change in the immediate future is glimpsed.

In response to the crisis, the Indonesian Vice Minister of Labor, Immanuel Ebenezer, said the government’s commitment to protect workers’ rights. After all, despite the mass dismissals, S&P Global reported an increase in manufacturing activity in the country. The purchasing managers index (CPI) rose to 53.6 in February 2025, compared to 51.9 the previous month, marking the highest level in 11 months. The report shows that the manufacturing sector experienced strong growth of new orders, production, purchases of raw materials and hiring.

However, experts warn that the PMI does not fully reflect the conditions of labor intensive industries, where layoffs and factor closures remain frequent and the obvious crisis. While capital intensive industries, such as metal processing and refining, are growing, many companies dependent on labor are in a desperate situation. The Central Statistics Agency of Indonesia (BPS) reported a drop in the consumer price index (CPI) from 105.99 in January to 105.48 in February 2025, indicating a deflation of 0.48% monthly.

In interannual terms, the deflation stood at 0.09%, while that registered since the beginning of the year is 1.24%. The main factors would be the reductions in the costs of housing, water, electricity and domestic fuels, which decreased by 3.59%, mainly due to discounts on electrical rates, which meant a decrease in inflation of 0.67%. With the continuous layoffs in the intensive sectors in labor, the budgetary restrictions of the government and the expiration of the incentives to the electrical rates in February 2025, it is expected that the consumption of the Indonesian households will slow down. These factors could make it difficult for the national economy to reach the 5% set rate in the first quarter of 2025.