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30 Mai 2023

Damiana Cut Emeria, CNBC Indonesia

Indonesia: Thousands of garment & footwear factory workers dismissed in mass layoffs

"Tragic! 2 Clothing Factories Closed, Thousands of Workers Layoff", 30 May 2023

The wave of layoffs (PHK) in Indonesia's labor-intensive industries has not yet ended. After massive layoffs in footwear (shoe) factories, now thousands of workers are also victims of layoffs in garment factories...

"Now there are 3 garment factories that are under negotiation because the company is having difficulty paying severance pay. In Bandung, Solo, Pekalongan," said General Chair of the Indonesian Fiber and Filament Yarn Association (APSyFi) Redma Gita Wirawasta...

"...in Bandung there are layoffs. In Solo and Pekalongan there are total layoffs, meaning the factory is closed. The number could be thousands. And this is just the layoffs that were reported, there are also those that were not reported, the number could also be thousands," he added.

However, Redma is still reluctant to reveal details of the companies that will lay off workers.

"I can't say the name of the company yet because it is in mediation. The workers' union intervened directly," he said.

Redma said that the current conditions in the country's textile industry and textile products are still worrying...

"...There is no sign of a recovery trend, in fact the condition is worse compared to the fourth quarter of 2022. This first quarter saw severe growth, negative 0.7%," said Redma.

"Current utilization is only 55% on average. So, don't think that factories are closing because of relocation. If they relocate, capacity will increase. But, this is a condition where our capacity is reduced," explained Redma.

A wave of layoffs in the national textile and footwear industry has been underway since the final quarter of 2022. Following the economic slowdown in export destination markets such as the US and Europe, this has triggered delays and reductions in orders.

[Translation via Google Translate]