Mass Textile Sector Layoffs Fuel Rise in Informal Employment in Central Java

SEMARANG — The number of Central Java residents working in the informal sector reached 13.04 million in February 2026, a 0.55% increase from 12.65 million in February 2025. According to data from Central Java’s Central Statistics Board (BPS), the total workforce in Central Java stood at 21.38 million in February 2026, with the informal sector accounting for 61% of the total. BPS Central Java Chief Ali Said explained that the rise in informal workers was driven by several factors. He cited mass layoffs in the textile sector, including the bankruptcy of PT Sri Rejeki Isman Tbk (Sritex), Indonesia’s largest textile company based in Sukoharjo, Central Java, in February 2025, which left thousands of workers unemployed. Ali noted many displaced textile workers turned to informal jobs such as ride-hailing drivers. ‘After being laid off, many turned to informal work like online motorcycle taxis; there were many. That’s why the number of ride-hailing drivers increased, absorbing many of those laid off. They couldn’t stay unemployed,’ he said on Sunday (24 May 2026). He added that ride-hailing services and agriculture are key sectors absorbing informal labour in Central Java. ‘February is typically harvest season, which also absorbs informal workers. So agriculture usually contributes significantly,’ he said. Ali gave an example: ‘Informal workers in agriculture often include housewives who previously did not work but enter temporarily during harvest season.’ ‘Because agriculture remains dominant in Central Java, many informal workers come from there,’ he added. He also mentioned new entrants to the labour force as another factor. ‘February usually sees a significant increase in new job seekers. When they can’t find formal employment, they turn to informal work first. This pattern isn’t unique to Central Java but is common across much of Indonesia,’ he said. Ali stressed that rising informal employment doesn’t necessarily indicate widespread layoffs, as multiple factors influence the surge in informal workers. ‘The challenge for us is for the government to boost formal employment opportunities. Formal sectors typically offer better wages, stability, and greater long-term sustainability than informal work,’ he concluded.