The wave of layoffs in Indonesia’s textile and footwear industries is expected to continue in 2023.

This is because the demand for export-oriented products is still weak due to the world recession. Since the beginning of the second semester of 2022 there has been a decline in the demand for textile and footwear products in global markets, especially for developed countries.

This condition has forced companies in the sector to significantly reduce production leading to reduced working hours and layoffs. There have been layoffs of 87,236 workers from just 163 companies. In other words, the world economic situation continues to show a negative trend. The projected layoffs remaining until the end of 2022 are very likely to exceed 2021 layoffs due to the global economic crisis that has occurred at the end of 2022.

Indonesia’s textile exports have dropped dramatically after the Russia-Ukraine war. The loss of this export market has made textile companies in Indonesia overstock. Because, on the other hand, the domestic market is not available since it is flooded with imported products. So this condition causes domestic textile products to go nowhere and the impact of which has been that textile companies in Indonesia are experiencing overstock.