Economy Policy
Indonesia reports 32% surge in layoffs in H1 2025
|
Updated on
The layoffs mainly affected the country’s manufacturing, retail, and mining sectors across industrial hubs in Java.
Indonesia's labor ministry reports a 32.1% surge in H1 2025 layoffs across manufacturing, retail, and mining due to economic downturn.
Layoffs in Indonesia have risen by 32.1% during the first half of 2025 compared to last year, according to the country’s labour ministry. The workforce reductions are concentrated mainly on the manufacturing, retail, and mining sectors due to a general economic downturn Indonesia and other Southeast Asian countries have faced in recent years.
According to government figures posted on the Satu Data portal of the Ministry of Manpower, 42,385 workers were laid off between January and June 2025, an increase from 32,064 during the same period in 2024.
The manufacturing sector bore the brunt, with 22,671 job losses, followed by wholesale and retail and then the mining and quarrying sectors. By region, Central Java reported the most job cuts, with 10,995 workers, followed by West Java with 9,494 and Banten with 4,267.
These three provinces, with a dense concentration of factories and industrial zones, are among Indonesia’s major industrial hubs. West Java alone contributes 60% of the national manufacturing output, while Central Java’s manufacturing centre makes up a significant share of the provincial GDP. Banten is home to several industrial facilities and is the largest steel producer in Southeast Asia.
Manpower Minister Yassierli attributed the losses to multiple factors, including market downturns, production cuts, changing company structures, and challenges.
Anwar Sanusi, Head of the Ministry of Manpower's planning and development agency, also credited the sharp rise in workforce reductions Indonesia is experiencing to mass layoffs by several companies in early 2025.
Despite the annual increase, Anwar noted a significant improvement in monthly figures, with June seeing a 65% drop in layoffs, with 1,609 compared to 4,702 in May. “There may be factors related to unresolved layoff processes,” Anwar said, adding that the ministry is still studying the cause of the steep drop in June.
Yassierli disclosed earlier in May that he considered postponing the publication of the monthly layoff data to avoid fuelling public concerns amid rising job losses and discontent over labour conditions. He said its release might dampen optimism and undermine the government’s recent labour protection programmes.
Manufacturers remain cautious on future growth prospects as soft domestic demand weighs down output, purchases, and employment. In June, Indonesia’s manufacturing Purchasing Managers’ Index (PMI) slipped to 46.9 from 47.4 in May, its second-lowest reading since August 2021.
The PMI report also noted that employment shrank for the second time in three months and at the sharpest rate in nearly four years.
Author
Loading...
Loading...