Coordinating Minister Airlangga: Government To Create Task Force On Layoffs

Coordinating Minister Airlangga: Government To Create Task Force On Layoffs

, 01 Dec 2024

Economic Minister Airlangga Hartarto announced that the government will establish a task force to address the rising trend of layoffs. He made this statement after being asked by reporters about concerns over layoffs due to the increase in the national minimum wage. "The government will create a task force related to layoffs," Airlangga said during a national leadership meeting of Kadin Indonesia at Hotel Mulia, Senayan, Jakarta, on Sunday (December 1, 2024).

Airlangga mentioned that the task force will focus on studying the fundamental aspects of industries in Indonesia. "We will look at the industry's fundamentals, so we will study that," he added. Previously, President Prabowo Subianto announced a 6.5 percent increase in the national minimum wage starting in 2025.

Prabowo stated that this minimum wage serves as an important safety net for workers with less than 12 months of service, taking into account the cost of living. "After discussions and meetings with labor leaders, we decided to raise the average national minimum wage by 6.5 percent in 2025," Prabowo said on Friday (November 29, 2024).

Meanwhile, Bob Azam, Chairman of the Labor Sector at the Indonesian Employers Association (Apindo), noted that the wage increase could affect company efficiency, potentially leading to more layoffs. "If companies cannot bear the increased labor costs, rational decisions regarding business calculations may occur, such as delaying new investments and expansions, large-scale efficiency measures that could lead to workforce reductions, or businesses exiting certain industrial sectors," Azam explained.

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