Jakarta, Indonesia Sentinel — Indonesia’s Ministry of Manpower (Kemnaker) reported that layoffs have impacted 59,764 workers as of October 24, 2024. The number expected to significantly rise after the Semarang Commercial Court declared textile giant PT Sri Rejeki Isman Tbk (Sritex) bankruptcy on October 21. The development has cast further uncertainty on the country’s labor market, with widespread layoffs already reported across several provinces.
Indah Anggoro Putri, Director General of Industrial Relations and Social Security at the Ministry, noted that Jakarta, Central Java, and Banten are experiencing the highest numbers of layoffs. “Jakarta leads with 14,501 layoffs, followed by 11,252 in Central Java and 10,254 in Banten,” Indah told Detik Finance on October 24.
The manufacturing sector has been the hardest hit, with 25,873 jobs lost, followed by 15,218 layoffs in services, and 10,254 in wholesale and retail.
Indah attributed this surge to slumping exports in the textile and garment sectors, along with aggressive cost-cutting strategies amid intensifying global competition. “Marketing and sales have shifted with digitalization, while illegal garment imports have only added strain to the industry,” she said.
Sritex Workers Face Uncertain Future
The bankruptcy of Sritex has raised concerns over potential mass layoffs of its employees. Ristadi, President of the Confederation of National Trade Unions (KSPN), warned of substantial impacts on thousands of Sritex workers.
“There are two main scenarios: current employees might be rehired, but with their seniority reset or on contract terms,” Ristadi explained, as reported by CNN Indonesia. “Alternatively, a new owner might prefer fresh hires, leading to mass layoffs among the existing workforce.”
Deputy Minister Stella Christie Outlines Her Focus in the Ministry, Enhancing Human Resource!
In addition to job insecurity, severance payments remain a pressing issue. According to KSPN, Sritex’s debts amount to Rp25 trillion, with assets totaling just Rp15 trillion.
“This debt-to-asset imbalance raises serious concerns that laid-off workers may not receive the severance they are owed,” Ristadi said. He added that in previous bankruptcy cases he has overseen, employees received only around 2.5% of their entitled severance, with some receiving nothing.
For now, Sritex is appealing the Semarang court’s ruling. Haryo Ngadiyono, Sritex Group’s Head of Human Resources, confirmed that the company’s operations are continuing and that it will not proceed with mass layoffs while legal remedies remain.
“We have submitted an appeal to the Supreme Court. Management is committed to avoiding mass layoffs as long as we have legal options,” Haryo said on Friday.
As layoffs continue to rise amid the economic challenges faced by Indonesian industries, particularly in manufacturing and textiles, the Sritex bankruptcy brings renewed attention to the urgency of worker protections and financial safeguards.
(Raidi/Agung)
