Oyuk Ivani S, Ilona Estherina, Jakarta – The Ministry of Manpower recorded that as of October 1, 2024, as many as 52,993 workers have been laid off. The Director General of Industrial Relations and Social Security for Workers, Indah Anggoro Putri, said the manufacturing sector contributed the largest number of layoffs this year, logging a total of 24,013 workers.
"There are 3 sectors that contributed the highest number of layoffs, namely the manufacturing sector with a total of 24,013 workers, the services sector with 12,853 workers, and the agriculture, forestry, and fisheries sector with 3,997 workers," Indah told Tempo on Tuesday.
Indah also unveiled the provinces in Indonesia with the highest number of layoffs; Central Java with 14,767 workers, Banten with 9,114 workers, and Jakarta with 7,469 workers.
According to Indah, several factors contributed to the staggering number of layoffs this year. These include the decline in exports and high domestic imports.
"In essence, because companies are unable to survive in business competition, exports decreased due to the wavering economic situations in other countries, as well as global challenges such as war and the flood of imported goods into the domestic market," Indah explained.
However, she claimed that the rights of workers who were laid off had been fulfilled.
When asked about the Ministry of Manpower's efforts to control the ever-growing number of layoffs, Indah mentioned corporate business strategy reform and support for macroeconomic policies.
The sluggishness of Indonesia's manufacturing sector has been in the spotlight for the past few months. Indonesia's Manufacturing Purchasing Manager's Index (PMI) in September still plunged into the contraction zone at 49.2. Contractions have occurred for three consecutive months since July 2024.
S&P Global Market Intelligence Economics Director Paul Smith said the underwhelming performance of the Indonesian manufacturing economy was linked to a generally subdued global macroeconomic environment during September
"With the fastest drop in external sales in nearly two years," he said in a press release distributed on Tuesday.
However, manufacturing firms recorded a small increase in employment for the first time in three months. This is partly related to increasing confidence, with companies reportedly very much expecting more stable operating conditions.