Apindo on Layoffs: The Triggers Must Be Addressed

The Chairman of the Employment Division at the Indonesian Employers’ Association (Apindo), Bob Azam, believes the issue of the growing wave of layoff threats must be examined from its root causes. He cited the example of layoff threats stemming from rising industrial gas prices. “This has been an industrial gas issue for years. So perhaps the problem is not the price but the supply. We are currently facing supply problems. Not just gas, but electricity and so on. Our energy procurement is problematic due to the Iran-America war. So what should be highlighted is not the layoffs, but the problem itself. That is what we must tackle,” Bob Azam said when contacted on Wednesday (24/6).

He explained that each sector faces various challenges, but the latent issue is continuously declining competitiveness. “Because wage increases outpace productivity, then there are policy changes. Now there are energy problems on top of that. We must fix this consistently, not reactively. We appear reactive. It will eventually become politicised,” Bob stated.

He urged the government to address structural problems, such as inefficient logistics that create bottlenecks. “Then there is the high-cost economy. Restitution issues for export-oriented manufacturing industries are crucial because they affect cash flow. There are also difficulties with raw materials. These should be resolved more quickly and easily. The rest are global issues, like unbalanced logistics containers,” Bob explained. “So the issue is not the layoffs. We must fix the causes. We already have a debottlenecking team. So I think we should handle the causes,” he added.

On the other hand, Apindo continues to prepare preventive actions to avoid layoffs. “We already have 12 measures to prevent layoffs. We are socialising these to companies so they can be implemented, including furloughing employees, reducing shifts, and cutting overtime,” Bob Azam concluded.