Danantara assures no layoffs in SOE streamlining drive
The Danantara Investment Management Agency (BPI) has assured that there will be no layoffs of employees during the ongoing streamlining of state-owned enterprises (SOEs). Danantara Chief Operating Officer Dony Oskaria stated in Jakarta on Thursday that all personnel will be retained and become part of the consolidated companies, in line with efforts to restructure SOEs to boost efficiency and corporate performance.
He added that the agency is currently streamlining the number of SOE entities from 1,077 companies to around 200–300 companies, with the process targeted for completion by 2026. According to Dony, President Prabowo Subianto has directed that the SOE transformation must not harm workers. “Certainly, the President does not want any layoffs,” he said.
He explained the streamlining is being carried out to address the high number of inefficient and loss-making companies. Of the current 1,077 companies, approximately 52 per cent are reportedly losing money, with accumulated losses reaching Rp20 trillion. Nonetheless, Danantara opted to retain the entire workforce after calculating the financial impact of the consolidation process.
Dony stated that the savings generated from consolidation far exceed the cost of retaining all employees. “We calculated, from the companies we are streamlining, what is the annual workforce cost? It turned out to be only Rp2–3 trillion,” he said. “So I thought, in that case I will take all the employees; I still save Rp47 trillion.”
He therefore emphasised that there would be no staff reductions in the restructuring process. All employees will be transferred to the merged companies. “No employees will be cut. They will become part of the consolidated companies. Because our thinking is that we do not want to wrong the employees. After all, it is not their fault,” he revealed.
Beyond guaranteeing no layoffs, Dony disclosed that the SOE streamlining programme has the potential to generate direct savings of up to Rp50 trillion per year. He noted that there have been layered transaction practices between parent companies, subsidiaries, and sub-subsidiaries, causing significant inefficiencies.
“So far, we have become accustomed to layering transactions between parent companies, subsidiaries, sub-subsidiaries, and further down, which causes inefficiency. The inefficiency is roughly Rp30 trillion,” Dony said. One step already taken is the merger of PT Pertamina Patra Niaga, Kilang Pertamina Internasional, and Pertamina International Shipping, which operate within a single business chain. Through this merger, Danantara succeeded in slashing various internal transaction costs and potential accounting losses.
“As a first example, we are now merging, and we have already saved approximately 600–700 million US dollars from this merger,” he stated. Similar practices were also found within the Telkom Group, where several fibre optic network development projects had to pass through multiple layers of companies before execution, incurring additional costs.
Dony said that if the entire streamlining process is completed and the number of companies is reduced to around 254 entities, Danantara will secure direct savings of approximately Rp50 trillion without having to wait for improved profitability from the consolidated companies. “So we have Rp50 trillion if this process is completed. We have immediate savings without needing to make improvements to the management quality and profitability of the merged results. Right before our eyes, there is Rp50 trillion,” he concluded.