Akmalal Hamdhi, Jakarta – The Indonesian Employers Association (Apindo) on Tuesday urged the government to accelerate deregulation and remove barriers to doing business, arguing that addressing the underlying pressures facing companies is the most effective way to prevent a wider wave of layoffs.

Apindo Chairwoman Shinta Widjaja Kamdani said the government should focus on resolving the root causes of business distress rather than responding only after workers have lost their jobs.

"Layoffs are the downstream problem. What we need to understand is what causes layoffs and what challenges businesses are facing," Shinta told reporters in Jakarta.

She said Apindo had identified a number of priority issues that should be addressed through deregulation and policy simplification, adding that the recommendations had been submitted to ministries, government agencies and the House of Representatives.

According to Shinta, many of the obstacles confronting businesses remain within the government's control and could be eased through faster policy reforms.

In addition to deregulation, she called for simpler licensing procedures, regulatory reform and lower costs of doing business, which she said continue to weigh on companies.

Shinta said the need for such measures had become more urgent as activity in the real economy weakened during the second quarter of 2026. Indonesia's manufacturing Purchasing Managers' Index (PMI) fell to 46.9 in June, its lowest level since June 2025, while the Industrial Confidence Index (IKI) slipped to 52.9.

The pressure has also begun to show in the labor market. According to BPJS Ketenagakerjaan, about 126,000 workers became inactive due to layoffs between January and May 2026, while roughly 50,000 Old-Age Security (JHT) claims were linked to job losses during the same period.

Despite those challenges, Shinta said Indonesia was not alone in facing mounting pressure on businesses. Many countries, she said, are grappling with slowing global growth, industrial restructuring, technological disruption and changes in global supply chains.

"The difference lies in how quickly governments respond with policies that can cushion businesses before those pressures develop into a broader wave of layoffs," she said.

Source: https://jakartaglobe.id/business/business-group-calls-for-deregulation-to-stem-job-cut