Labour Leader Insists on Abolishing Outsourcing, Here's the Reason

Jakarta, CNBC Indonesia - President of the Indonesian Workers’ Confederation (KSPI) and President of the Labour Party, Said Iqbal, has once again emphasised his demand for the abolition of the outsourcing or aliht daya system in Indonesia. According to him, the notion that eliminating outsourcing would trigger a massive wave of layoffs is untrue. Said Iqbal stated that companies still have the option to employ workers through a contract system without resorting to the outsourcing scheme. “It’s not true that abolishing outsourcing will lead to layoffs. It’s not true. Because the employer company can use five-year contract workers. That’s what the Constitutional Court judge said,” Said Iqbal told reporters when met at the Ministry of Manpower office in Jakarta on Thursday (7/5/2026). He views the narrative about the threat of mass layoffs due to the abolition of outsourcing as deliberately constructed to intimidate. “So it’s not true that outsourcing will cause massive layoffs. That’s nonsense and a monster created to scare,” he said. This statement was made amid labour unions’ rejection of Ministry of Manpower Regulation No. 7 of 2026, which is seen as legitimising the broader practice of outsourcing. Previously, KSPI along with the Labour Party even stated they would write to President Prabowo Subianto to request the revocation of that regulation. Workers also gave a deadline to the Ministry of Manpower to revise the policy. Said Iqbal emphasised that the demand to abolish outsourcing is also in line with President Prabowo’s stance previously expressed in his International Labour Day or May Day speech. “President Prabowo Subianto in his May Day speech agreed to the abolition of the outsourcing work system,” he said. Labour unions themselves demand that outsourcing workers should no longer be employed in the company’s core production processes. If still allowed, workers request that outsourcing be limited only to support jobs such as cleaning services, security, drivers, catering, and certain mining services.