Between January and April, Indonesia saw a sharp uptick in job losses, with at least 70,000 workers laid off – a figure that nearly matches the 80,000-person rise in unemployment recorded between February 2024 and February 2025.

This alarming trend was flagged by the Labour Party and a coalition of national trade unions, who warn that the country is teetering on the brink of a labour market crisis.

A glaring disparity in data

These numbers sharply diverge from official government data. According to the Ministry of Manpower, only 26,000 layoffs had been recorded as of May 2025 – just a third of the figure reported by labour groups.

Manpower Minister Yassierli previously told lawmakers that the ministry’s tally already captured nearly a third of all layoffs reported in 2024, raising questions over the accuracy and transparency of government figures.

The Central Statistics Agency (BPS) offers a deeper layer of insight: while the national unemployment rate dipped slightly year-on-year to 4.76% in February 2025, the absolute number of unemployed rose by 80,000. This is largely due to the expansion of Indonesia’s labour force, which has grown to over 153 million. This represents an increase of 3.67 million from the previous year.

Other indicators also point to an upward trend in job cuts. Data from the Indonesian Employers Association (Apindo) and the Social Security Agency for Employment (BPJS Ketenagakerjaan) show that more than 73,000 people withdrew from their old-age pension savings (JHT) between January and April, a move legally permitted only in the case of a layoff or retirement.

At the same time, over 52,000 claims were filed for Job Loss Insurance (JKP), a government scheme created to support the newly unemployed.

Read: The layoff crisis in Indonesia, explained

Lack of worker protections?

One of the most jarring examples of abrupt termination came in early April, when PT Maruwa Indonesia, a manufacturer operating since 1999, shut down its Batam facility without prior notice. Located in Bintang Industri II, the closure led to the dismissal of 205 employees, including 49 permanent and 156 contract staff.

No clear severance arrangements were communicated, stoking criticism over how employers are handling layoffs.

Labour Party President and KSPI (Confederation of Indonesian Trade Unions) leader Said Iqbal didn’t mince his words.

“Why does the Ministry of Manpower claim only 26,000? This is clearly manipulative – an attempt to polish the image in front of the president,” Iqbal said last month.

This is not just a data error; it borders on public deception.”

His comments reflect growing frustration among union leaders who are calling for a systemic, transparent response. At the top of their list is the creation of a National Layoff Task Force – an independent body that would track and publish accurate layoff data, investigate the root causes, and coordinate policy solutions.

“Given the scale of this crisis,” Iqbal said, “we are demanding real solutions to protect workers and their families.”

In his May Day speech, President Prabowo Subianto announced plans to set up a National Labour Welfare Council, an advisory body that would include labour representatives and other stakeholders to guide worker protection policies. Though short on details, the announcement was welcomed by some as a tentative step in the right direction.

Protests demanding justice for workers

Meanwhile, tensions are mounting. The KSPI and KSP-PB (Indonesian Labour Union Confederation) have called for nationwide protests. Demonstrations were slated to take place across more than 300 cities and regencies, with the largest gatherings expected outside the House of Representatives and the Presidential Palace in Jakarta.

“The rally will demand justice for workers and a complete overhaul of the national labour system,” Iqbal said.

The manufacturing sector has been hit hardest, followed by wholesale and retail trade and various service industries. According to Minister Yassierli, the reasons for the layoffs range from financial strain and operational relocations to strike-related retaliation and general cost-cutting initiatives.

Apindo has issued a stark warning: if current trends persist, layoffs could reach 250,000 by year’s end. The projection has caused ripples of concern throughout HR and business communities, especially as Indonesia seeks to position itself as a manufacturing and logistics powerhouse in Southeast Asia.

Youth unemployment presents another critical challenge. As of February this year, a staggering 16.16% of Indonesians aged 15 to 24 were jobless, compared to just 1.67% among those aged 60 and over – the only group that actually saw unemployment rise.

The imbalance underscores the urgent need for youth-oriented employment strategies and more robust workforce planning.

The impact of an escalating jobs crisis

Indonesia is at a pivotal moment. The current wave of layoffs – exacerbated by opaque data, inconsistent responses, and looming unrest – reflects deeper structural vulnerabilities in the country’s labour ecosystem.

While the government’s employment statistics may suggest a stable picture, the lived experiences of tens of thousands of workers tell a different story.

Bridging the data gap is a necessary first step. A National Layoff Task Force, as proposed by union leaders, could offer a credible and transparent mechanism to monitor employment trends, hold companies accountable, and shape evidence-based policy responses.

Without reliable data, any effort to fix the problem will be akin to navigating a storm without a compass.

Equally important is a proactive policy shift towards worker protection, reskilling, and job creation – especially for the youth, who face some of the highest unemployment rates in the region.

Investments in digital skills, green jobs, and social enterprises could help stem the tide and offer a more resilient employment future.

Unless bold and coordinated action is taken, Indonesia risks not just a jobs crisis, but also a confidence crisis  where public trust in institutions erodes, social unrest brews, and economic momentum stalls.