Ika Krismantari, Jakarta – White-collar workers have enjoyed relative safety from the current trend of layoffs sweeping the country, with dismissals largely hitting medium- to low-level workers in some manufacturing companies. Until now.
Stock brokers, who have benefited from years of bullish stock market performance, are now feeling the heat – a sign suggesting the economic hardship will leave no stone unturned.
Securities companies here are being forced to lay off workers – joining dozens of manufacturing firms who have announced the dismissals of thousands of workers – in an effort to cut costs following a recent revenue rout that has hit local and regional markets.
Included in this group is the nation's largest security firm, PT Trimegah Securities, which is likely to dismiss up to 40 workers this month. It has a total work force of 400.
Since early September, equity markets in emerging economies, such as Indonesia, have been facing massive sell-off pressure from investors in need of liquidity amid the global financial crunch.
"It (the layoffs) is a normal thing, because it is a global phenomenon that we cannot avoid," Trimegah president director Aviyasa Dwipayana told The Jakarta Post in a recent phone interview.
The latest data from the Indonesia Stock Exchange (IDX) shows profits of 121 securities houses listed in the bourse declined by a whopping 70.2 percent to Rp 864 billion (US$80.35 million) from January to September this year from Rp 2.9 trillion in the same period last year.
The drop in the daily transaction value to only Rp 1 trillion a day from the normal average of up to Rp 5 trillion has also worsened the situation for securities houses which in part collect fees from transactions.
Foreign brokerage companies are also taking a hit to their revenue, which could lead to dismissals.
One of them is DBS, whose head office in Singapore recently confirmed layoffs, saying the move was part of the company's work force reduction program, under which the company would reduce its work force by about 6 percent, or equal to 900 people, primarily targeting workers in Singapore and Hong Kong.
"Staff in other countries including Indonesia and our subsidiaries like DBS Vickers were similarly affected albeit in smaller num-bers," a statement sent to the Post said without giving details.
Sources said the local office of DBS Vickers Securities had so far laid off 27 people out of a total work force of 77. Other foreign securities companies are likely to face the same problems, although a confirmation is a rarity as news of a job cut would certainty hurt their image here.
Some laid-off workers are bound by contracts prohibiting them from publicly disclosing their dismissal. Including Sari – an alias – who said her company had given her a considerable compensation package as an incentive to keep her dismissal private.
The IDX said it might request the Finance Ministry give tax incentives for mergers and acquisitions involving securities companies to help keep the industry healthy.