Indonesia Layoffs Hit Over 32,000 Workers in H1 2026 Amid Manufacturing Slow
Indonesia recorded 32,389 manufacturing job losses in the first half of 2026 amid a severe sector slowdown and rising operational costs. The government has formed a special task force to address the crisis, while labour groups warn that actual redundancy figures could be significantly higher.
Indonesia's labour market faced mounting strains during the first half of 2026, with official figures revealing that 32,389 workers were laid off between January and June. The widespread job losses were heavily concentrated in the country's manufacturing sector, which continues to struggle against a backdrop of weakening domestic demand, rising operational expenditures, and tighter global market conditions.
Manufacturing Slowdown and Regional Impact
The latest employment figures, published by the Ministry of Manpower through its Satu Data Kemnaker platform, indicate that West Java bore the brunt of the contractions, accounting for nearly 21% of all national job losses. Banten and East Java followed closely behind as the second and third hardest-hit regions. As per a report by ET HRWorld, these statistics capture participants enrolled in the government's Job Loss Insurance programme, though local labour unions contend that actual figures may be higher due to unrecorded informal separations. Patreon Layoffs: Company Cuts 20% of Workforce as CEO Discusses AI Impact.
Economic Indicators and Contributing Pressures
The surge in redundancies aligns with a broader contraction across industrial indexes, highlighted by the Indonesia Manufacturing Purchasing Managers' Index sliding to 46.9 in June. Businesses have frequently cited softer consumer spending and escalating production costs as primary drivers behind the slowdown. Recent central bank business surveys confirm that employment continued to contract through the second quarter, maintaining pressure on local human resources networks. Meta Layoffs: Company Faces Lawsuit Over Alleged AI Driven Job Cuts Selection.
Government Response and Workforce Strategy
In response to the growing employment crisis, President Prabowo Subianto's administration has established a dedicated Layoff Task Force to anticipate further workforce reductions amid ongoing macroeconomic volatility. Deputy Manpower Minister Afriansyah Noor emphasised that fostering robust collaboration between corporate employers and worker syndicates will remain essential. HR leaders are urged to prioritise proactive workforce planning, targeted reskilling initiatives, and employee retention support while manufacturing activity remains subdued.
(The above story first appeared on LatestLY on Jul 24, 2026 11:56 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).