The trend of lay-offs in Indonesia is now showing a worrying escalation. The phenomenon, previously concentrated in labor-intensive industries such as textiles, garments, and footwear, is now spreading to the services sector and technology companies as the national economy slows down.
Senior Researcher and Executive Director of Indef, Tauhid Ahmad, revealed that the expansion of layoffs is an indicator that economic pressure has spread widely, no longer just limiting the movement of the manufacturing industry, but also starting to erode sectors highly dependent on public consumption and business activity.
The manufacturing sector itself is still considered the most vulnerable group. This industry is squeezed by a combination of difficult conditions, ranging from weakening global market demand to soaring production costs due to reliance on imported raw materials and the depreciation of the rupiah exchange rate, which continues to put pressure on domestic product competitiveness.
In addition to cost factors, the domestic market is now flooded with imported goods at highly competitive prices, through both legal and illegal channels. This condition makes it increasingly difficult for national industry players, especially in the electronics and clothing sectors, to survive. At the same time, the weakening purchasing power of the public, particularly lower-middle income groups, further worsens the contraction phase of manufacturing activity in the country.
To curb broader negative impacts on unemployment rates, the government is urged to take decisive protective measures. These measures include implementing anti-dumping policies, imposing import tariffs, and providing fiscal incentives such as tax cuts and easier access to financing for affected business owners.
Furthermore, simplifying bureaucracy and minimum wage policies that maintain a balance between worker welfare and business continuity are crucial keys. These efforts are considered essential so that companies still have room to survive amidst increasingly complex economic challenges.
