Indonesia’s sovereign investment agency Danantara has pledged that no employees will lose their jobs as the government undertakes a major restructuring of state-owned enterprises (SOEs) aimed at improving efficiency and cutting costs.
Danantara Chief Operating Officer Dony Oskaria said all workers would be retained and absorbed into consolidated entities as the government reduces the number of SOEs from 1,077 to between 200 and 300 by 2026.
The restructuring programme forms part of President Prabowo Subianto’s broader effort to improve the performance of state-owned businesses and eliminate inefficiencies across the sector.
“Certainly, the President does not want any layoffs,” Oskaria said in a statement on Thursday, stressing that employee welfare remains a key consideration throughout the transformation process.
According to Oskaria, more than half of Indonesia’s state-owned entities are currently operating at a loss. Around 52% of the 1,077 companies under the SOE umbrella are loss-making, with combined losses estimated at Rp20 trillion (US$1.12 billion).
Despite the scale of the consolidation, Danantara determined that retaining employees would be more cost-effective than reducing headcount. Oskaria said the financial benefits generated through streamlining operations significantly outweigh the costs of keeping workers on payroll.
“We will not be laying off any employees,” he said, adding that staff from affected entities will be transferred into the merged organisations.
The agency estimates that the restructuring programme could generate direct savings of up to Rp50 trillion (US$2.79 billion) annually by eliminating overlapping operations and reducing layers of transactions between parent companies, subsidiaries, and affiliated entities.
Oskaria noted that complex corporate structures have long contributed to inefficiencies, with internal transactions across multiple layers of companies costing the state an estimated Rp30 trillion (US$1.68 billion).
One of the first major consolidation initiatives involves the merger of PT Pertamina Patra Niaga, Pertamina International Refinery, and Pertamina International Shipping, businesses that operate within the same energy value chain.
The integration has already produced substantial savings, according to Oskaria, who said the merger has reduced transaction costs and accounting inefficiencies by approximately US$600 million to US$700 million.
Similar inefficiencies have been identified within the Telkom Group, where infrastructure projects such as fibre-optic network development often pass through several layers of subsidiaries before execution, increasing costs and slowing decision-making.
If the streamlining programme reaches its target of approximately 254 state-owned entities, Danantara expects to realise Rp50 trillion in annual savings even before improvements in profitability are factored in.
The restructuring marks one of the most ambitious overhauls of Indonesia’s state-owned sector in recent years, with the government betting that consolidation can improve performance while preserving jobs across the workforce.