Wave of redundancies becomes reality
The Confederation of Indonesian Workers’ Unions (KSPI) confirmed layoffs of approximately 350 workers at PT Xacti Indonesia operating in Depok, West Java. The company is also reported to have ceased operations due to inability to withstand economic pressures and a weakening global market.
KSPI President Said Iqbal stated that the PT Xacti Indonesia case proves the union’s warnings about a looming wave of layoffs are materialising.
‘Indeed, approximately 350 workers at PT Xactie in Depok have been laid off and the company has closed. This confirms that KSPI’s previous warnings were not baseless or alarmist. The information came from within the companies themselves, and the situation is now unfolding,’ said Said, quoted in a press release on Monday (25 May).
He added that affected workers have received their due entitlements under collective agreements, including severance pay double the statutory minimum under the Labour Law.
‘Laid-off workers have received severance pay double the legal minimum. They have also been granted length-of-service awards and other compensations agreed upon collectively,’ said Said.
KSPI attributed the company closures and layoffs to global economic pressures from prolonged conflicts. This has caused import raw material prices to surge and production costs to skyrocket.
‘The war has caused dollar-denominated imported raw material prices to spike. Production costs have risen while export markets have weakened. As an export-oriented company, PT Xactie could not compete as global demand fell, leading to its closure,’ said Said.
He added that since early April 2026, the union had warned of potential layoffs at around 10 companies, affecting an estimated 9,000 workers. Now, he said, signs of this are emerging across various industrial sectors.
‘KSPI has been warning since the start that a major wave of layoffs was coming. This is not speculation. We were directly informed by company management. And now it’s becoming a reality,’ he said.
Layoffs have also occurred in other industrial areas including Banten, Tangerang, and Serang. Companies such as PT Shewa, Luncheong, and PT PWI have reportedly reduced hundreds of workers, particularly in footwear and textiles.
‘Even large companies like Nikomas have cut around 279 jobs. This shows the formal industrial sector is far from healthy,’ said Said.
In Karawang, a company has ceased operations affecting 295 workers. Additionally, workforce efficiency measures impacted around 294 employees, while 200 layoffs occurred due to industrial relations issues.
Meanwhile, in Sidoarjo, East Java, CV Asri has laid off approximately 200 workers. ‘Automotive and related companies are also being hit. Car prices have risen, demand has fallen, consumer purchasing power weakened, leading companies to implement efficiency measures and layoffs,’ Said added.
KSPI forecasts the threat of layoffs could continue for the next three months, primarily due to high production costs and weakening market demand making it difficult for many companies to compete.
To address this, KSPI, alongside the Labour Party, stated it will continue engaging with the government and the House of Representatives (DPR RI) to push for swift mitigation measures.
‘The government has established a Layoff Mitigation Task Force. KSPI will continue providing information and pushing for concrete steps. The most important thing is ensuring workers’ rights are fully upheld,’ said Said.
In addition to ensuring workers’ rights are met, KSPI is pushing for new job placements for those laid off. ‘Where possible, workers can be reassigned to other companies. For instance, in Tangerang, some workers were transferred to a new factory in Brebes,’ he said.
KSPI also plans to strengthen communication with the DPR RI to ensure mass layoffs become a priority in national industrial and labour policy discussions.
‘We will discuss with the DPR RI so they are aware of the serious situation in the formal industrial sector. The government and DPR must collaborate to address this layoff threat,’ he said.
As a rapid response to rising layoffs, KSPI and the Labour Party have opened an Orange Desk or Layoff Advocacy Desk to support affected workers.
‘KSPI and the Labour Party have opened the Orange Desk as a layoff advocacy hub. We want to ensure workers do not face this situation alone,’ he concluded.