MP Urges Government to Anticipate Wave of Layoffs Due to Middle East Conflict

Jakarta – A member of Commission IX of the Indonesian House of Representatives (DPR RI) from the PDI Perjuangan (PDIP) faction, Pulung Agustanto, has issued a warning for the country to mitigate the potential wave of mass layoffs (PHK) threatening the national industrial sector in the near future.

This is because Indonesia’s economy is expected to face pressures from various conditions impacting the country, such as the war in the Middle East and the threat of El Niño.

He assesses that in this situation, the business world will hit labour-intensive sectors that employ many workers, ultimately causing a wave of mass layoffs.

“Layered global pressures, from the escalation of conflict in the Middle East to the El Niño weather anomaly, are the main triggers for the current fragility of employment stability,” Pulung stated in a written remark on Friday, 17 April 2026.

Pulung views that the government can no longer operate with business as usual. Extraordinary steps must be taken to prevent various crises from worsening.

Based on economic projections, this year more than 100,000 workers are potentially at risk of layoffs, a significant increase from the 88,000 figure in the previous year. Data shows that around 9,000 workers in 10 companies—particularly in the textile and automotive sectors—are currently threatened with job loss, with the affected areas concentrated in West Java, Banten, Central Java, and East Java.

Pulung considers this threat a serious alarm for labour protection and national economic stability.

“The threat of mass layoffs must not be allowed to become a social crisis. The state must be present to protect workers, maintain industry continuity, and ensure the economy remains people-oriented,” Pulung emphasised.

In his view, the geopolitical situation in the Middle East has triggered a surge in energy and raw material prices, widening the fiscal deficit and weakening the rupiah exchange rate. This condition directly increases production costs, especially in labour-intensive industries that rely on imported raw materials such as plastics and cotton.

Industrial concerns are also reflected in data showing that 67 percent of companies do not plan to recruit new workers, while dozens of other companies are choosing to delay expansion for up to five years ahead.