Indonesia Records 72,336 Layoff Reports Through October 2026 as Factory Jobs Come Under Pressure

West Java accounts for one in five reported job losses

Indonesia recorded 72,336 workers reporting layoffs through its Job Loss Insurance system from January through October 2026, with West Java accounting for 14,694, or about one in five. Garment and automotive businesses were among the industries hardest hit in the province as falling orders pushed companies to reduce costs.

The Ministry of Manpower's figures, cited in statements in early November, place Banten second with 8,649 workers, followed by Central Java with 6,860, East Java with 6,574 and Jakarta with 5,360. Together, those five provinces account for 42,137 reports, about 58.3% of the national total.

Behind the figures are two connected changes: workers losing company jobs and some finding replacement work with fewer hours or in the informal economy. Indonesia's unemployment rate fell in August, while the shares of informal workers and people seeking more working hours increased.

The layoff count covers workers recorded in Jaminan Kehilangan Pekerjaan, known as JKP, rather than every dismissal nationwide. Workers have up to six months after termination to submit a claim, so recent monthly figures can change as applications arrive.

That reporting delay matters for understanding the headline total. The ministry's January to September publication recorded 63,789 workers. The October publication contains 8,547 more reports, but those additions can include claims relating to earlier months as well as October terminations. The ministry directs readers to the latest release for updated monthly figures.

What the ministry's count covers

The Ministry of Manpower's January to September dataset records 63,789 workers reporting termination through JKP and identifies West Java as the largest contributor, with about 20.45% of reports. It also explains the six month claim window and the continuing revision of recent data.

JKP is Indonesia's Job Loss Insurance programme. Its administrative records track participating workers who report losing their jobs. Terminations are grouped according to the termination date entered in the application, even when a worker submits the claim later.

The programme's reporting rules exclude voluntary resignations, retirement, permanent total disability and deaths. The ministry identifies Government Regulation No. 6/2025 and Manpower Ministerial Regulation No. 2/2025 as the rules governing those exclusions.

The ministry has explained that its application records remain open to revision:

Data in the JKP system may change at any time due to the addition, updating, or correction of data.

Said Iqbal, the presidential special adviser for labour and workers' welfare, argues that actual layoffs are higher because many cases fall outside the government database. Iqbal also leads the Confederation of Indonesian Trade Unions, or KSPI, and the Labour Party.

Where job losses are concentrated

West Java and Banten together account for 23,343 workers in the January to October figures, about 32.3% of the national total. The provincial classification follows where workers live, which may differ from where their employers operate.

The provincial breakdown extends well beyond Java. East Kalimantan recorded 3,971 workers, South Kalimantan 3,596, North Sumatra 3,484, Central Sulawesi 2,924 and South Sulawesi 2,767. One entry had no identifiable province.

A different published provincial breakdown gives West Java 14,876, Banten 8,686, Central Java 6,956, East Java 6,600 and Jakarta 5,399, alongside East Kalimantan at 4,024 and South Kalimantan at 3,603, while retaining the same national total of 72,336. The reason for those provincial discrepancies has not been explained.

West Java's labour and transmigration office identifies garments and automotive manufacturing among the sectors most affected. Lower orders are especially difficult for businesses that employ large numbers of people to produce clothing, footwear and other goods.

Earlier releases show a changing record

The ministry's publications during 2026 provide successive snapshots of reported terminations. Each snapshot includes a different reporting period and may contain revisions to earlier months.

• January to June: The Satu Data publication recorded 32,389 workers, including 6,727 in West Java, 3,782 in Banten and 2,851 in East Java.
• January to August: The published national count reached 53,490, with West Java at 10,880.
• January to September: The official dataset recorded 63,789 workers, with West Java accounting for about 20.45%.
• January to October: The national count reached 72,336, with West Java at 14,694 in the main provincial breakdown.
• Late November: KSPI and the Labour Party plan to announce an updated tally of their own.

An earlier ministry statement in late June cited about 43,000 layoffs during the first half, compared with 32,389 in the Satu Data publication covering JKP participants. The scope of the JKP count and subsequent updates are central to understanding the different totals.

Iqbal said KSPI had counted about 70,000 layoffs through June. In early November, he cited a ministry figure of roughly 83,000 through late October or early November and estimated that the annual count could exceed 90,000. The ministry's January to October publication gives 72,336; the underlying release for the 83,000 figure he cited was not identified.

KSPI plans to use its next update to compare records with the ministry, employment insurer BPJS Ketenagakerjaan and the Indonesian Employers Association, known as Apindo.

Factories face weaker orders and higher costs

Indonesia's manufacturing indicators show the pressures businesses faced earlier in the year. The S&P Global manufacturing Purchasing Managers' Index fell from 50 in May to 46.9 in June. The index surveys business conditions, with readings below 50 indicating contraction.

New orders weakened as businesses described softer domestic demand and pressure on household purchasing power. Export orders recorded their sharpest decline since August 2021, with higher prices reducing the competitiveness of Indonesian products abroad.

Bank Indonesia's labour utilisation index also fell, from 48.76 in the first quarter to 48.65 in the second. Its projection for the third quarter was 49.7, still below the 50 threshold separating expansion from contraction.

Iqbal identifies textiles, garments and footwear made for export as the industries under greatest pressure. He attributes the strain to weaker international demand, higher industrial gas and fuel costs, and movements in the US dollar. He also links rising production costs to the conflict involving Iran, the United States and Israel.

In May, Iqbal warned that reductions or closures at 10 companies across Banten, West Java, Central Java and East Java could affect around 9,000 workers. Businesses serving Indonesia's domestic market also faced weaker demand, he said.

Factory closures bring immediate concerns over pay

PT Parkland World Indonesia 6 in Rangkasbitung, Lebak district, dismissed about 1,100 workers on October 23. Reductions had taken place gradually since late 2025 before reaching their peak in October.

Iqbal said the wider PWI group had reduced its Indonesian operations from six factories to two locations, in Serang and Jepara. He put employment at the Jepara factory at about 8,000 people and described the Lebak closure mainly as a company decision to reduce costs.

Iqbal also highlighted around 1,170 layoffs at PT Ghim Li Indonesia in Batam. He said he intended to visit the company because workers' severance arrangements and the possibility of being employed again remained unclear.

Severance is compensation paid when employment ends. For affected households, the amount and timing of that payment determine how much money is available while they search for another job. Iqbal said PWI 6 used a severance calculation described as a multiplier of 1.0, compared with 0.5 in some other cases.

The factory examples also reveal a timing issue in the national statistics. Banten's August employment survey took place two months before the October 23 dismissals in Lebak. The next survey period identified for examining conditions after those layoffs is February 2027.

Why unemployment fell while layoffs continued

Statistics Indonesia, known as BPS, recorded a national unemployment rate of 4.75% in August 2026, down from 4.85% a year earlier. The labour force numbered 155.37 million people: 147.99 million employed and 7.38 million unemployed. The number unemployed fell by about 77,000 from August 2025.

Moh Edy Mahmud, BPS deputy for national accounts and statistical analysis, explained at a November 5 briefing that people dismissed from company jobs can remain in the employed category if they find other work, including informal work.

BPS uses the National Labour Force Survey, or Sakernas, and international labour statistics standards. A person doing work to earn or help earn income for at least one hour during the reference week is classified as employed.

A factory worker who loses a regular job and then earns money driving a motorcycle taxi or doing occasional construction work may therefore still count as employed. Their employment status records the work they are doing, while their hours and type of work provide more detail about their circumstances.

The ministry's layoff records count reported employment terminations over several months. BPS measures people's labour market status during a survey period. A person can appear in the layoff records and later be counted as employed in Sakernas after finding another source of income.

More workers have informal jobs or want more hours

BPS recorded an increase in the informal share of employment from 57.80% in August 2025 to 57.93% in August 2026. The formal share fell from 42.20% to 42.07%.

Underemployment increased more sharply, from 7.91% to 8.68%, a rise of 0.77 percentage points. This category covers people working fewer than 35 hours a week who are still looking for work or willing to take additional work.

For a household, moving from regular factory shifts to a few days of work can mean a smaller or less predictable income. The unemployment rate, informal employment share and underemployment rate each describe a different part of that experience.

Banten illustrates the combination. Its unemployment rate fell from 6.69% in August 2025 to 6.61% in August 2026, while the formal employment share dropped by 1.53 percentage points to 53.35%. The province had 3.12 million formal workers and 2.73 million informal workers.

Wholesale and retail trade in Banten lost about 96,790 workers. Manufacturing remained its largest source of employment, accounting for 20.80% of workers. The provincial economy therefore faced employment changes across both factories and services.

West Java's investment and employment figures tell different parts of the story

West Java received Rp138.1 trillion in realised investment during the first half of 2026. The total comprised Rp76.8 trillion in the first quarter and Rp61.3 trillion in the second, a quarterly decline of Rp15.5 trillion, or about 20.2%.

The province received Rp296.8 trillion during all of 2025, representing 15.4% of Indonesia's national investment total that year. Its first half investment in 2026 amounted to 46.5% of that annual figure.

BPS West Java also recorded the absorption of about 205,000 workers in figures covering February and May 2026, alongside around 1.79 million unemployed people. New recruitment and investment were taking place while other workers experienced dismissals.

For West Java, the practical challenge is matching people leaving affected businesses with employers that are hiring. The province's large share of recorded layoffs puts particular pressure on that transition in garments, automotive manufacturing and other industries reducing their workforces.

Training and worker payments become the next priorities

South Sulawesi's labour and transmigration chief, Jayadi Nas, said on November 6 that his office had received reports covering 1,157 affected workers from 24 districts and cities. The ministry's January to October JKP count for the province was 2,767. Jayadi suggested older reports awaiting updates could explain the difference.

Transportation, mining and manufacturing contributed to the reports reaching the provincial office. Jayadi also described changing skills requirements in industries using more advanced technology.

The province submitted the names of the 1,157 workers for free vocational training, with an allowance during the course. It also plans training for about 24,000 people through cooperation with the Ministry of Manpower, including workers still employed, jobseekers and vocational school graduates.

Jayadi said the provincial government was coordinating with companies over severance and access to JKP. Job fairs and training are intended to connect people with employers and help them qualify for available positions.

At national level, Deputy Manpower Minister Afriansyah Noor said President Prabowo Subianto had established a Layoff Task Force to prepare for further job losses. He also called for closer cooperation between employers and trade unions to manage workplace relations.

The next scheduled checkpoints are KSPI's planned late November count and the February 2027 Sakernas survey period. For workers already dismissed, the immediate priorities are receiving compensation, accessing insurance and finding work with sufficient hours and income.

Key Points

• The Ministry of Manpower recorded 72,336 workers reporting layoffs through JKP from January through October 2026.
• West Java led with 14,694 reports. The five leading provinces accounted for about 58.3% of the national total.
• Workers can submit JKP claims up to six months after termination, allowing recent monthly figures to be revised.
• Weaker orders and production costs put pressure on manufacturing, particularly export businesses making textiles, garments and footwear.
• August unemployment fell to 4.75%, while informal employment and underemployment increased.
• KSPI plans an updated count in late November. February 2027 is the next survey period identified for examining employment after the October layoffs in Banten.