Trouble! Indonesian Garment Factories Begin Laying Off Workers - Working Hours Reduced

Jakarta, CNBC Indonesia - Rising production costs are beginning to directly impact the operations of small and medium-sized industries, particularly in the garment business. Efficiency has become an unavoidable step to ensure business continuity. Business actors are starting to make adjustments across various lines.

“Now there is already about 30% efficiency,” said Chairman of the Ikatan Pengusaha Konveksi Berkarya (IPKB) Nandi Herdiaman to CNBC Indonesia at JiExpo on Wednesday (15/4/2026).

These efficiency measures cover many aspects, from energy usage to manpower. Therefore, various aspects have become more efficient at present.

“Everything is being made more efficient,” he said.

These adjustments are even starting to affect reductions in production activities and employees’ working hours.

“Employees have already started to be laid off by around 30%,” he revealed.

The impact is not insignificant, considering the large number of workers in this sector who are spread across various regions.

“If calculated, thousands of workers have already been affected,” he stressed.

Nevertheless, business actors are striving to avoid permanent layoffs.

“Not yet to PHK, but working hours have already been reduced,” he said.

This step is taken as an effort to survive amid continuously rising cost pressures. Business actors also face a dilemma in keeping selling prices competitive in the market.

“Prices cannot be raised arbitrarily,” he stated.

This condition is making the industry’s room to manoeuvre increasingly limited, thus efficiency becomes the primary choice.

“Everything is arranged so that the business can continue to run,” he concluded.