Companies
Experts suggested that workforce reductions would likely be framed as early retirement or voluntary resignation packages accompanied by generous compensation.
The logo of the State-Owned Enterprises (SOEs) Ministry is seen installed in front of the ministry's building in Jakarta on Jan. 1, 2025. (Shutterstock/Zaen_M)
As the government pushes ahead with plans to reduce the number of state-owned enterprises (SOEs) from 1,077 companies to between 200 and 300 by the end of 2026, state asset fund Danantara has insisted that the restructuring will not result in mass layoffs.However, experts argue that workforce reductions are an inevitable consequence of such large-scale corporate restructuring and have urged the government to adopt a proper approach to safeguard workers' welfare throughout the process.
According to Danantara chief operating officer Dony Oskaria, around 52 percent of SOEs are currently unprofitable, with cumulative losses reaching Rp 20 trillion (US$1.1 billion). Dony said retaining workers would remain financially viable because annual labor costs at the companies being streamlined amount to only Rp 2 trillion to Rp 3 trillion, far below the estimated Rp 50 trillion in annual savings expected from consolidation.
