March 20, 2025
JAKARTA – The upcoming Lebaran or Eid al-Fitr celebrations will be less than festive for Mr Sriyono, 52, who like many Indonesians goes by one name.
He is one of the over 10,000 workers at textile manufacturer PT Sri Rejeki Isman, popularly known as Sritex, who lost their jobs on Feb 26, after the company lost its court appeal against bankruptcy.
“I still can’t believe this… I didn’t change companies because it feels like family here. I feel so sad, I’m speechless,” he told The Straits Times over the phone. He had worked at the company’s factory in Solo, Central Java, for 33 years, serving refreshments to foreign buyers visiting the plant.
The closure of Sritex, once South-east Asia’s largest textile manufacturer, comes after a wave of shutdowns in at least 60 other textile and garment manufacturers across Indonesia between Jan 2023 and Dec 2024, according to the Indonesian Filament Yarn and Fiber Producers Association (APSYFI).
It also follows closures of other large manufacturing companies in Indonesia in early 2025, such as piano-maker Yamaha Music, Sanken Electronic which produces electric components, and Danbi International that produces fake eyelashes, which have resulted in thousands of job losses.
Some 60,000 workers from 50 companies lost their jobs in January and February, according to the Indonesian Trade Union Confederation (KSPI) in a media statement on March 15.
And more layoffs are in store for the year. Indonesia’s Center for Research, Parliamentary Expertise Agency estimates that 280,000 workers will be laid off in 2025, making it the highest annual number since the Covid-19 pandemic, which saw 3.6 million people lose their jobs in 2020.
This estimate translates into an unemployment rate of 5.2 per cent of the country’s total working population, said economist Dr. Muhammad Hanri at the University of Indonesia in Jakarta.
Analysts told ST that these job losses arise from the government’s failure to protect domestic industries from foreign competition.
“The government is busier attracting new investments rather than maintaining existing industries,” said Mr. Bhima Yudhistira, executive director of think-tank Center of Economic and Law Studies. He noted that recent moves to ease import rules and provide tax incentives has opened the doors to cheaper Chinese goods, particularly textile products.
Economists are also concerned that the layoffs come amid Indonesia’s first recorded deflation in over 20 years. In early March, the Central Bureau of Statistics or BPS, announced that the consumer price index (CPI) fell 0.09 per cent year-on-year in February, marking the first annual deflation since March 2000.
“This (deflation) was not due to weaker purchasing power, but because of the discounted electricity tariffs (in January and February),” BPS chief Amalia Adininggar Widyasanti said in a press conference.
However, Dr Jahen Fachrul Rezki, an economist from the Institute for Research on Economics and Society at the University of Indonesia, said deflation could be a warning sign for Indonesia’s economy. “Ongoing deflation needs to be anticipated, as it reflects a decline in consumption and investment from both people and businesses,” he told ST.
Indonesia posted economic growth of 5.03% for 2024, and is expected to post 5 per cent growth for this year. This is still below the ambitious target of 8 per cent growth set by President Prabowo Subianto within his first term in office.
In Dec 2024, his government unveiled stimulus measures including 445.5 trillion rupiah (S$36.5 billion) for social assistance initiatives for low- and middle-income Indonesians, tax breaks, and industry incentives.
More recently, the government has announced special discounts for the Ramadan fasting month and Eid holidays, including lower-priced flight tickets, reduced toll fees, and shopping rebates. It has also earmarked 50 trillion rupiah for religious holiday allowances to be paid to 3 million civil servants, aimed at boosting purchasing power.
These populist measures come amid growing worries over a weakening economy and slowing consumption in South-east Asia’s biggest economy.
Dr. Jahen said the government needs to build credibility in implementing its policies. “To address deflation, the government must strengthen purchasing power and create quality jobs – not just increase job numbers – among other measures,” he added.
The Indonesian government has said the wave of layoffs is under control and that the manufacturing industry is still showing signs of growth. At a press conference on March 5, Indonesia’s Minister of Manpower, Prof. Yassierli said Sritex workers would receive some financial aid.
However, such aid may not come soon enough for Mr Sriyono and his family of three, as he tries to stretch his last paycheck of 2.3 million rupiah for the Lebaran festivities marking the end of the Muslim fasting month at the end of March, and beyond.
“It’s already our tradition to celebrate Lebaran, after all, it’s only once a year. But we also have to save money. We need to make sure that the last salary we have will last after Eid,” he said.
- Stania Puspawardhani is Indonesia correspondent for The Straits Times, based in Jakarta.