President targets streamlining of SOEs, Dony Oskaria guarantees no layoffs
President Prabowo Subianto has stated that the government is accelerating the streamlining of State-Owned Enterprises (SOEs), targeting a final count of around 250 companies, while guaranteeing that all employees from closed entities will be retained.
Speaking at the closing of the National Sarasehan of the Indonesian Science, Technology, and Industry Convention (KSTI) on Sunday, President Prabowo confirmed the final target with Danantara Chief Operating Officer and Head of the SOE Management Agency, Dony Oskaria. “From over a thousand SOEs, we have now closed more than 200. Eventually, we will leave around 300,” said President Prabowo. When asked about the ultimate figure, Dony replied, “The end target will be around 250, Sir.”
The President responded by emphasising that the streamlining is necessary to relieve SOEs of high operational costs. “Imagine, we have closed more than 750. This is all public money. Companies that are not profitable, only paying overhead,” he remarked. Prabowo stressed that the rationalisation must be completed promptly to make state companies more efficient and capable of delivering greater benefits to the public, targeting the completion of the transformation within two years.
Dony Oskaria previously assured that the SOE streamlining process would not result in layoffs. All employees will be retained and become part of the consolidated entities. He explained that Danantara is currently streamlining approximately 1,077 SOEs into around 200 to 300 companies, with the process targeted for completion by 2026. He noted that about 52 percent of SOEs are still loss-making, with total losses reaching Rp20 trillion, making consolidation a necessary step to improve efficiency.
Despite this, Dony confirmed that the entire workforce will be kept because employee costs are far smaller than the potential savings from the restructuring process. “We calculated that annual labour costs are only Rp2 to Rp3 trillion. In that case, I will take all the employees, and we still save Rp47 trillion,” he said. He reiterated that there will be no reduction in staff during the consolidation, with all employees transferred to the merged companies. “No employees will be reduced. They will become part of the consolidated companies. We do not want to wrong the employees because it is not their fault,” he stated firmly.
Beyond guaranteeing no layoffs, Dony mentioned that the SOE consolidation programme has the potential to generate direct annual savings of up to approximately Rp50 trillion. These savings come from eliminating layered transactions between holding companies, subsidiaries, and sub-subsidiaries, which have been deemed inefficient. According to Dony, the merger of several sub-holdings within Pertamina has already yielded efficiency gains of around USD 600 to 700 million. Similar measures will be applied across other SOE business groups as part of the transformation to make state companies leaner, healthier, more efficient, and capable of contributing more significantly to the national economy.