TEMPO.CO, Jakarta - Chairperson of the National Economic Council (DEN) Luhut Binsar Pandjaitan acknowledged the wave of layoffs currently taking place in Indonesia.
Nevertheless, he stated that these job losses are being followed by the emergence of new employment opportunities.
"We predict that there will be around 67,000 new jobs that may be available before the end of this year," Luhut said at the International Conference on Infrastructure (ICI) 2025 at JCC Senayan, Thursday, June 12, 2025.
Luhut attributed the creation of these jobs to the growing number of Chinese investors establishing industries in smaller regions, particularly in Central Java. "They employ 10,000 people. This is something we never predicted," said the retired general.
Earlier, Minister of Manpower Yassierli reported that 24,036 workers had been affected by layoffs from January 23 to April 2025.
Central Java was the region with the highest number of layoffs at 10,692, followed by DKI Jakarta with 4,649 and Riau with 3,546.
According to Yassierli, the manufacturing industry accounted for the majority of the layoffs with 16,801 workers, followed by wholesale and retail trade with 3,622, and other service sectors with 2,012.
"If anyone asks, layoffs at the moment compared to last year have indeed increased," he said.
Meanwhile, data from the Indonesian Employers’ Association (Apindo) indicated that the number of workers laid off had reached 40,000. The organization projects that over 250,000 workers may be laid off by the end of 2025.
Chairman of Apindo’s Labor Sector, Bob Azam, said this trend is reflected in various leading economic indicators. "Such as the decline in credit expansion from double digits to single digits," Bob told Tempo on Sunday, May 25, 2025.
As of April 2025, credit growth stood at 8.8 percent year-on-year, down from 9.16 percent in March and 10.30 percent in February. Bob also pointed to a contraction in the Manufacturing Purchasing Managers’ Index (PMI), which fell sharply by 5.7 points to 46.7 in April 2025, the lowest since the Covid-19 crisis in 2022.
Another sign of weakening economic activity is reduced consumer spending, reflected in a drop in the Consumer Confidence Index (CCI) from 126.4 in February to 121.1 in March 2025.
Anastasya Lavenia contributed to the writing of this article.
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