Mass Layoffs Threaten Indonesia, Labour Leader Reveals Early Warning Signs
President of the Confederation of Nusantara Workers (KSPN) Ristadi has revealed the potential for a wave of terminations threatening Indonesian workers. He urged the government to immediately intervene to anticipate mass layoffs.
"As we know, the general condition of domestic industries that depend on imported raw materials is under pressure. Rising raw material prices and increasing oil prices have resulted in higher production costs," he told CNBC Indonesia on Thursday (18/6/2026).
"Meanwhile, domestic producers are struggling to raise selling prices. This situation is exacerbated by stagnant, even declining, public purchasing power," Ristadi added.
He suspects these symptoms are among the reasons a shoe factory in Bandung, West Java, has furloughed around 4,000 workers.
"Approximately 4,000 workers at a Nike shoe factory in Bandung have been furloughed. Two days ago, we received information from the KSPN management at the factory that starting 15 June 2026, around 4,000 workers out of a total of 14,000 were furloughed," he disclosed.
"The cause is a delay in the supply of raw materials from America. The information suggests the supply delay occurred because previously the raw materials were supplied directly by Nike, but this was later handed over to a third-party vendor, so there may be technical obstacles. The raw materials are estimated to be available only in July," he explained.
However, Ristadi sees a potentially larger problem.
"What worries me more is the disruption of raw material supply not solely due to rising price pressures, but because of a decline in purchasing power for Nike shoes, causing Nike to reduce its orders," he stated.
"This could have fatal consequences, namely the potential for unavoidable mass layoffs. I hope this does not happen," Ristadi continued.
Therefore, Ristadi demanded the government work harder to protect domestic industry by creating strict policies accompanied by strong field supervision.
"For example, tightening imports of goods that can already be produced domestically, stabilising prices and energy supply for industry, practical, fast, and cheap licensing, rational taxes, and preparing a workforce that meets the needs of the business world," said Ristadi.
Ristadi also revealed several phenomena that could be early warning signs of impending mass layoffs at a company or factory.
First, the company frequently delays paying worker salaries and other bills.
"Second, there is no certainty of new orders for the coming month. And third, a continuous decline in production volume," Ristadi clarified.
"However, not all experience these signs. If there is no decline in production volume, it is usually because they receive spillover orders from similar factories that have closed, whether oriented towards the domestic or export market," he concluded.