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Article

7 Jun 2024

Pramesti Regita Cindy, Bloomberg Technoz

Indonesia: Layoffs in textile industry increase by 66%

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"API: Textile Industry Layoffs Soar 66%, Most in Fabric Factories", 7 June 2024

The Indonesian Textile Association (API) revealed that this year's wave of layoffs in the textile and textile products (TPT) industry occurred most often in the intermediate industrial line that processes semi-finished raw materials to produce fabrics.

API Chairman Jemmy Kartiwa Sastraatmaja confirmed that throughout January-May 2024, the number of layoffs in the textile industry has reached nearly 11,000 workers, which he claimed increased quite drastically from the same period last year.

"Until May 2024, the total layoffs that occurred in the textile industry were approximately 10,800 workers affected by layoffs. Until the first quarter of 2024, there was an increase in the number of layoffs of 3,600 workers or an increase of 66.67% [year on year/yoy]," he explained to Bloomberg Technoz, Friday (7/6/2024).

Currently, according to Jemmy, the utilization of textile factories in Indonesia is less than 50% and many factories have closed their businesses, directly proportional to the trend of layoffs that continue in the sector...

The largest textile industry base in Indonesia is located in the provinces of West Java and Central Java. In these two regions alone, Jemmy said that the total number of workers affected by layoffs reached approximately 7,200 workers at the end of last year...

Although Jemmy said that layoffs in the textile industry are more common in the semi-finished or intermediate raw material sector, it is possible that layoffs can also occur in the apparel textile industry sector or downstream lines.

"It is possible that Indonesia's downstream industry or those that produce finished products and apparel have made many layoffs. This is due to the practice of undervalue in HS code trade records," he explained...

Previously, the President of the National Confederation of Trade Unions (KSPN) Ristadi explained that throughout the beginning of the year until May 8, 2024, the accumulation of workers in the textile industry sector who were victims of layoffs reached 10,800 people.

"The cause of the layoffs is because orders have dropped to no orders at all, both export and local," he explained when contacted, Thursday (6/6/2024).

Ristadi said the reason why the local textile industry is increasingly difficult to survive until it decides to cut labor is also influenced by the onslaught of textile products, especially from China.

"As a result, domestic textile products cannot sell because they lose the selling price," he said..

The following are the details of companies and workers in the textile sector who are reported to be affected by the layoff storm until May 2024:

PT Sae Apparel

Location : Semarang

Status : Closed

Workers affected by layoffs: 8,000 workers

PT Sinar Panca Jaya

Location : Semarang

Status : Efficiency

Workers affected by layoffs: 400 workers

PT Pulomas

Location : Bandung

Status : Efficiency

Workers affected by layoffs: 100 workers

PT Alenatex

Location : Bandung

Status : Closed

Workers affected by layoffs: 700 workers

PT Kusuma Group

Location : n/a

Status : Closed

Workers affected by layoffs: 1,600 workers

Especially for PT Kusuma Group, the details:

PT Kusumahadi Santosa (fabric production, spinning, finishing, and printing) : 500 employees

PT Kusumaputra Santosa (yarn production) : 400 employees

PT Pamor Spinning Mills (yarn production) : 700 employees

[translation via Google Translate]

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