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West Java sees mass layoffs due to COVID-19

Jakarta Post - November 3, 2020

Jakarta – The COVID-19 pandemic has caused unprecedented business disruption, forcing many companies to cut workers. Tempo.co reported on Monday that 19,089 employees in West Java had lost their jobs due to COVID-19.

West Java governor Ridwan Kamil said that over 2,000 companies had felt the impact of the pandemic, adding that manufacturing and service industries were the two sectors greatly affected by the pandemic.

Meanwhile, West Java Manpower and Transmigration Agency head Rachmat Taufik Garsadi said that, as of October, around 460 companies had officially cut the number of workers they employ.

He added that many companies were still planning to reduce their number of workers.

Rachmat said they had confirmed the data with the Workers Social Security Agency (BPJS Ketenagakerjaan) and found that 19,089 employees had been laid off.

Rachmat explained that mid-level manufacturing companies were the majority of organizations that had to cut down the number of employees.

According to Rachmat, this industry relied heavily on imported raw materials and usually produced export goods.

In addition to the manufacturing industry, Rachmat mentioned automotive as another industry that had felt the impact of the pandemic.

With that in mind, West Java province decided not to raise the minimum wage.

Ridwan said that 60 percent of factories in Indonesia were located in West Java, saying that most factories on Java island were located in West Java and Banten and the two provinces experienced the impact of the pandemic.

"So, if we raise the minimum wage, we are worried that more companies will need to lay off their employees," he said, adding that the situation would create losses for the employees.

Amid the current situation, however, Ridwan claimed that the province's economic indicators had shown positive trends, particularly in exports, purchasing power and bank credit.

Ridwan further shared that the transportation and communication sectors had also seen an increase of 47 percent.

"Goods and people transportation services have been moved to digital platforms, causing the economy in this sector [to increase]," he said.

The COVID-19 pandemic has caused millions of workers to lose their jobs. In April, one month after President Joko "Jokowi" Widodo announced the first COVID-19 cases in Indonesia, over 1.2 million workers from 74,439 companies in both the formal and informal sectors had either been told to stay home or been laid off, according to Manpower Ministry data.

According to Jakarta Manpower Agency data, at least 162,416 workers in the capital city alone had reportedly been laid off or furloughed. (jes)

Source: https://www.thejakartapost.com/news/2020/11/03/west-java-sees-mass-layoffs-due-to-covid-19.htm