New Regulations Could Potentially Trigger Mass Layoffs in Labour-Intensive Industries

VIVA – The Association for the Development of Islamic Boarding Schools and Society (P3M) has highlighted the potential for mass layoffs as a result of several new regulations that are seen as potentially impacting national labour-intensive industries.

The Director of P3M, KH Sarmidi Husna, said that the government needs to consider the broad impact of each policy on communities that depend on the labour-intensive industrial sector.

“Policies must consider the social and economic impacts, as well as the livelihoods of communities that depend on the industrial sector,” Sarmidi said in a written statement on Friday, 15 May 2026.

The labour-intensive industrial sector currently employs millions of workers and is a source of livelihood for tens of millions of people. Therefore, he is concerned that the new regulations will only increase the pressure on the business world.

A representative of the labour union stated that policy pressures in recent years have already had an impact on the reduction in the number of workers in several industrial sectors. They believe that new rules that do not take into account the actual conditions on the ground could trigger a larger wave of layoffs.

In addition to employing many workers, the labour-intensive industrial sector is also considered to have a significant contribution to the national economy and state revenue.

P3M affirmed that the results of the discussion will be formulated into policy recommendations and submitted to the government so that the rules issued still consider the balance between health, economic and employment sustainability.

“We hope that the results of this discussion can be a real contribution in encouraging policies that are fairer, more proportional and favour the wider community,” concluded KH Sarmidi Husna.