Business World Enters Survival Mode, Layoffs No Longer the Main Issue

JAKARTA, KOMPAS.com - Entering the second quarter of 2026, the business world, currently under pressure due to global uncertainties, is beginning to enter survival mode.

Apindo Labour Affairs Chairman Bob Azam stated that geopolitical conflicts since the beginning of this year have caused production costs to rise.

Meanwhile, domestically, public purchasing power is weakening. These two factors are putting pressure on the national business world.

“Business is full of challenges and uncertainties. Production costs are rising, while purchasing power is weakening. So, we are truly in business survival mode first, rather than the government,” he told Kompas.com on Monday (4/5/2026).

Bob emphasised that in the current conditions, the issue of layoffs (PHK) is no longer the main focus for business actors.

The issue of PHK is no longer the main issue at present not because business actors do not care about workers’ fates, but because this issue can be prevented or a middle path found so as not to harm both parties.

He revealed that efforts to curb the potential for PHK are more determined by industrial relations at the company level.

Therefore, communication between management and worker unions becomes a key factor. “The key to avoiding PHK is bipartite cooperation between the company and the worker union. How communication is built and mutual trust established,” he said.

On the other hand, the business world cannot rely too much on support in the form of incentives from the government.

This is in line with the fiscal conditions that are assessed to be increasingly limited.

Therefore, business actors are expected to rely more on internal strategies to survive, while keeping the risk of PHK in check amid ongoing business pressures.

“At present, we cannot talk about incentives because the fiscal space is practically closed. The government now also needs liquidity, especially to support swelling subsidies,” he said.