Indonesia records 15,425 layoffs in early 2026 as labour market pressures persist

Indonesia’s labour market is showing signs of continued strain after the Ministry of Manpower revealed that 15,425 workers were laid off between January and April 2026, underscoring the uneven recovery facing Southeast Asia’s largest economy amid global uncertainty and domestic industrial adjustments.

The latest figures, released through the ministry’s Satu Data portal, are based on participants registered under the Job Loss Insurance (JKP) programme administered by BPJS Ketenagakerjaan. 

While the data indicates that layoffs have started to slow after peaking in February, analysts say the concentration of job losses in key industrial provinces points to deeper structural pressures within Indonesia’s manufacturing and resource-driven sectors.

According to the ministry, West Java emerged as the hardest-hit province, accounting for around 21.65% of all reported layoffs nationwide. The province recorded 3,339 affected workers during the January–April period, reflecting ongoing vulnerabilities in Indonesia’s industrial heartland, where labour-intensive sectors such as textiles, electronics, automotive supply chains, and export manufacturing remain exposed to slowing global demand and rising operational costs.

The sharpest wave of layoffs occurred in February 2026, when 6,610 workers lost their jobs. That number later dropped to 2,863 in March before easing further in April, suggesting that the initial shock may be stabilising. However, economists caution that the downward monthly trend does not necessarily signal a full recovery, as companies across several industries continue to adopt cost-efficiency measures amid volatile energy prices, currency pressures, and weakening international trade conditions.

Outside West Java, other provinces recording significant layoffs included South Kalimantan with 1,581 workers, Banten with 1,536, East Java with 1,367, East Kalimantan with 1,237, and Jakarta with 1,140 affected workers.

The regional spread of layoffs also highlights Indonesia’s dual economic challenge. In industrial provinces such as West Java and Banten, manufacturers are grappling with softer export activity and rising production expenses. Meanwhile, layoffs in resource-rich regions like South and East Kalimantan may reflect fluctuations in commodity-linked industries, including mining and energy supply chains.

The data arrives at a sensitive time for the Indonesian government, which has recently introduced broader economic protection measures, including remote-work initiatives aimed at reducing fuel consumption during the global energy crisis linked to Middle East tensions and disruptions around the Strait of Hormuz.

Although Indonesia’s headline economic growth has remained relatively resilient compared to some regional peers, labour market indicators are increasingly becoming a concern for policymakers. A sustained rise in layoffs could weaken household spending, pressure regional economies, and complicate the government’s efforts to maintain social stability ahead of a potentially volatile second half of 2026.

At the same time, the relatively low layoff figures in provinces such as West Papua, Gorontalo, North Maluku, and Maluku suggest that employment pressures remain concentrated in Indonesia’s major industrial and urban economic corridors rather than evenly distributed nationwide.

The Ministry of Manpower has not yet detailed which industries contributed most heavily to the layoffs, but the data is expected to intensify scrutiny over corporate restructuring, manufacturing competitiveness, and the broader resilience of Indonesia’s workforce in an increasingly uncertain global economic environment.