Dede Adhitama, Cirebon – The abrupt shutdown of Yihong Novatex Indonesia has left 1,126 workers jobless just days before Eid al-Fitr, highlighting a growing crisis in Indonesia's labor-intensive manufacturing sector.
The Yihong case is the latest in a wave of mass layoffs sweeping the nation's textile and footwear industries. In Central Java, Indonesia's largest textile company, Sri Rejeki Isman (Sritex), is ceasing operations after a bankruptcy ruling, impacting over 10,000 workers.
In Banten, major footwear producers Victory Chingluh and Adis Dimension Footwear – suppliers to global brands like Nike and Adidas – have collectively laid off 3,500 workers due to collapsing orders. The industry is struggling under falling export demand, increasing operational costs, stiffer competition from Vietnam and Bangladesh, and a flood of cheap imports from China.
Adding to the pressure, the US recently imposed retaliatory tariffs on Indonesia, raising rates on Indonesian goods by up to 32 percent. In response, the Indonesian government launched a Rp 20 trillion ($1.3 billion) credit facility to support industries such as textiles, garments, and footwear. However, for many workers already laid off, the damage has been done.
In Cirebon, Yihong Novatex – a Chinese-owned manufacturer of printed shoe fabrics – suddenly closed its factory in Kanci Village, Astanajapura, after a four-day worker strike in early March. Initially sparked by the dismissal of three employees, the protest quickly escalated into a full production halt.
The company claimed the unauthorized strike led to order cancellations by clients, resulting in massive financial losses. A public notice signed by the company's director said operations would be terminated as of March 10, with all 1,126 workers officially laid off.
"PT Yihong Novatex Indonesia informs of the termination of employment due to order cancellations caused by an unauthorized strike in early March," the letter read.
Employees who accepted the layoff were promised severance, March salaries, and Eid bonuses to be disbursed on March 17. Those who objected would need to wait for a court ruling to receive compensation.
Heartbreak before the holiday
For many of the laid-off workers, the timing could not be worse. Siti Nursyamsah, a resident of Sindanglaut, was devastated to find her name on the layoff list. She showed up for work only to find the factory gates locked.
"I came to the factory, but it was shut down. The guard told me the factory was closed," she said tearfully. "I never expected this. Now I'm unemployed just before Eid, with no money and a family to feed."
Siti, like many others, said she joined the protest without fully understanding the reasons behind it – merely following her coworkers' lead.
"This is the saddest Eid of my life. I just want to work again. If I get another chance, I won't join protests blindly. I hope the local government can help us return to work," she pleaded.
Yanti Komala, who had only started working in December, echoed that sense of regret. "I didn't really understand the issue. I joined because everyone else did. Now I have nothing," she told Beritasatu.com. The Jakarta Globe's sister publication.
Rini, another affected worker, said fear played a big role. "I didn't want to protest, but I was afraid not to. Now I'm jobless and have no income at all."
Legal scrutiny and government mediation
Cirebon's Manpower Office (Disnaker) is currently investigating the legality of the mass layoffs. The head of the office, Novi Hendrianto, stated the company is not bankrupt and should explore other options before cutting jobs.
"We don't believe Yihong Novatex is in a bankrupt state. We're mediating between the company and the union to resolve the dispute, but no agreement has been reached yet," Novi said.
So far, no clear statement has been issued by the company regarding whether it will reopen or rehire the workers. As negotiations continue, hundreds of former employees are left in limbo, unsure of their futures during what should be a joyous holiday.
Yihong's case is emblematic of the wider troubles facing Indonesia's labor-heavy industries. With global demand slowing, tariffs rising, and cheaper competition abroad, the textile and footwear sectors are on shaky ground.
For laid-off workers like Siti, Yanti, and Rini, the hope is simple: to work again, rebuild their lives, and never experience such a bitter holiday again.