Minister of Investment/ Head of Indonesia Coordinating Board (BKPM) Bahlil Lahadalia has confirmed of massive layoffs in textile industry in several location in Indonesia’s West Java Province.
“It is true that there are massive layoffs of workers in West Java ,” Bahlil said on Monday, July 29, 2024 .
He cited that the layoffs have been caused by three factors. First, the relocation of factories from West Java to other areas in Java. Second, the factories were closed because the machines used were obsolete. Third, the production cost is too high in comparison with other countries.
“All those factors are related to productivities of Indonesian workers. We need to find the middle path, we pay attention to workers rights, and the workers also have concerns on the sustainability of the company,” Bahlil said.
“If the factories are closed down, we all will be in a loss. There will be no jobs, the industry cannot run, and the state revenue will be diminished.” he added.
However, the minister said, despite massive layoffs, there are also new investment in textile sector. He cited the inauguration of a new shoes factory in Batang Industrial Estate, Central Java, that creates 2,000 new jobs.
“We should also report on new investment, not only those [investment] leaving this country,” he said.
Indonesia, he added, needs to grant sweeteners for textile industry in order to make the industry runs well, citing an example on how banks can financé rejuvenation of machines.
“If we do not grant incentives, they will leave,” he said.
“There should also be cooperation from workers. Those receiveing living wages should think about the survival of industry. Because both parties (workers and employers) need each other,” he added.
As reported by Kontan, layoffs have been rampant again this year, especially at industrial centers in West Java. The textile and garment, shoe and furniture industry sectors dominate cases of workers’ dismissal due to factory closures or relocation. In fact, this mass layoff has started since 2021 and is still ongoing.
The Confederation of Labor Unions of the Archipelago (KSPN) noted that 13,800 textile company workers were laid off during the first six months of this year. It is predicted that this will continue to happen given the fluctuating global economic conditions. Inevitably, export-oriented companies are affected because orders are low.
