Textile Industry Lays Off 64,000 Workers, Entrepreneurs: Worse than During Covid-19

TEMPO.CO, Jakarta - Chairman of the West Java Province Textile Product Businesses Association (PPTPJB), Yan Mei, revealed to have received reports of workers layoff in 14 regencies and cities in West Java. Since two weeks ago, 64,000 workers from 124 textile companies have been laid off.

"This situation for us is more severe than [during] Covid-19. During the pandemic, we know the problem was only that we couldn't do shipping but the market persisted. Meanwhile, as of now, the market has become unpredictable," she said in a press conference held virtually on Wednesday, November 2, 2022.

She explained that the layoffs occurred due to the decline in consumer purchasing, particularly in the largest export-destination countries such as the United States and Europe. Yan Mei said that in her factory, in Bogor Regency, there has been a 50 percent decline in demand since April 2022.

The situation, according to Yan Mei, has turned difficult. In the following months, demand was not stable until it dropped as much as 70 percent.

Until now, she added, 18 textile companies have been closed resulting in the termination of around 9,500 employees. The number is expected to continue to grow as new reports come in.

The unpredictable geopolitical situation between Russia and Ukraine has also created logistical disruption to international food supplies. As a result, food inflation could continue to soar and drive people to prioritize spending on food as a basic need rather than spending on textile products.

If food inflation turns uncontrollable, Yan Mei might worry the decline in purchases will keep dropping and layoffs will continue to ensue. Meanwhile, if the layoffs keep occurring, the production process will be difficult for the company. Therefore, she hoped that the government would immediately implement policies so that the textile industry can keep producing.

"We must continue to express to the government, asking to find the best solution for the current situation," She said.

The decline in exports also occurred in large companies such as Nike, Victoria's Secret, and others, Yan Mei claimed. Moreover, the rate of decline now reached 40 to 50 percent.

Chairman of the Indonesia Textile Association (API), Jemmy Kartiwa Sastraatmadja, previously stated the threat of the global recession is starting to take an effect on businesses, specifically in the declining export.

He assessed the decline in textile commodity exports would turn more alarming in 2023. The situation does not only transpire in Indonesia but also in other biggest textile exporting countries such as China, Bangladesh, Vietnam, and India.

Riani Sanusi Putri | Translator: Intern / Imaji Lasahido

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