Global Economy Slump Triggers Mass Layoffs of Garment Workers in Jepara
Global economic pressures affecting export volumes are beginning to have a serious impact on the manufacturing sector in Central Java. Thousands of workers at two large garment companies in Jepara Regency are facing mass layoffs. According to Media Indonesia’s monitoring on Tuesday (19/5), the layoff process is underway and has been officially reported to the Jepara District Office of Cooperatives, Small and Medium Enterprises, Manpower and Transmigration (Diskopukmnakertrans) in Jepara. The two companies most affected are PT Hwaseung Indonesia (PT HWI) and PT Samwon Busana Indonesia.
PT HWI Jepara is reported to have laid off at least 4,000 workers. Meanwhile, PT Samwon Busana Indonesia has taken similar action affecting 120 employees. This development is feared to have a domino effect on the regional economy’s stability in the years ahead.
Zamroni Leistiaza, head of Diskopukmnakertrans Jepara, confirmed that the authority has received official reports related to the workforce reductions. “Yes, we have received the layoff reports from the two companies. The main reason is a downturn in exports and the need for corporate efficiency,” he said.
Akhmad Taufik, head of the Labour division of Diskopukmnakertrans Jepara, explained in more detail that PT HWI was forced to take this bitter step due to a drastic reduction in orders. This is a direct spillover from an uncertain global economy, which weakens purchasing power in international markets.
“The company is seeking to adjust production capacity to the market demand which has weakened in recent months. At present, they are also not recruiting new staff,” Taufik added.
On the other hand, PT Samwon Busana Indonesia revealed that efficiency measures were taken because the company incurred losses from not meeting production targets. Taufik noted an imbalance between targets and realisation on the shop floor. “Each worker is targeted to complete 10 pieces, but in reality they can only reach 7 to 8 pieces. This triggers losses, leading to efficiency measures,” he explained.
The Jepara Regency Government through Diskopukmnakertrans said it will continue to monitor the layoff process. The government’s primary focus is to ensure workers’ rights, especially severance payments, are fulfilled in accordance with applicable law.
To date, coordination between local authorities and company management continues to minimise the social impact of these mass layoffs.