Rising Layoffs Strengthen the Case for Wider Access to Global Jobs

Indonesia’s rising layoffs in the first half of 2026 underline the need for an employment strategy that protects jobs at home while widening access to quality work abroad. The Ministry of Manpower recorded 32,389 workers affected by layoffs between January and June, with West Java, Banten, and East Java reporting the highest numbers.

The increase came as manufacturing faced weaker demand, higher production costs, and growing pressure on business competitiveness. Indonesia’s manufacturing Purchasing Managers’ Index fell to 46.9 in June 2026, signaling contraction. These conditions reinforce the need for policies that help companies remain productive, preserve employment, and support sectors with strong job creation potential.

On the other hand, overseas employment can provide an additional pathway for workers who cannot yet be absorbed by the domestic market. The Indonesian Business Council white paper, Expansion of Indonesia’s Overseas Worker Industry, estimates that current migrant worker deployment levels could reduce unemployment by around 0.21 percentage points, equivalent to 324,600 workers annually between 2025 and 2029. A 30 percent increase in deployment could raise the impact to about 422,000 workers each year.

“Overseas employment should not replace domestic job creation. Both need to move together. Indonesia must keep businesses productive while preparing workers to access formal, safe, and higher quality opportunities in global labour markets,” said Principal Policy and Program IBC Fazlur Rahman Hassan.

IBC’s study stresses that expansion should focus on low and medium-skilled occupations with strong global demand, including caregiving, welding, horticulture, and hospitality. Progress will depend on training that meets destination-country standards, stronger foreign-language capabilities, internationally recognized certification, and more efficient placement procedures.

A stronger migrant worker ecosystem can complement domestic employment policies. With adequate safeguards and skills development, global labor mobility can support quality job creation, household incomes, and wider economic resilience, while strengthening Indonesia’s position in the global workforce.