Govt taking steps to handle wave of lay-offs: VP

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Vice President Ma’ruf Amin has said that the government has taken a number of strategic steps to deal with the recent wave of employment terminations (PHK) in Indonesia, including those carried out by start-up companies.

“Several industries, including start-up companies, have laid off their employees because of the recession. The government has prepared various anticipatory programs,” Amin informed in Pontianak, West Kalimantan, on Wednesday.

Recently, a number of start-up companies in Indonesia, including Shopee, Grab, Gojek Tokopedia (GoTo), and Ruangguru, laid off employees.

GoTo confirmed it will let go of 1,300 employees or 12 percent of its total employees due to the macroeconomic slowdown. Meanwhile, educational startup Ruangguru laid off hundreds of employees due to the impact of the global economic slowdown.

“The government plans to create a labor-intensive program to accommodate the laid-off workforce. The big programs will be divided into small areas to help the people. For example, the laid-off workforce can participate in making bricks or roof tiles in the community, also including building roads and buildings as well,” Amin said.

The labor-intensive programs are expected to accommodate workers, although not in the digital technology sector, he added.

“Another step is to conduct vocational skills education that leads to entrepreneurship,” he disclosed.

Moreover, the government has also prepared community land clearing through social forestry to help people gain access to land.

“To help those who do not have a job. Besides, the government is pursuing investments, as has been done in various places, such as in special economic zones; we will bring those investors who can absorb a large workforce,” he informed.

According to Amin, quite a number of efforts are being made by the government to tackle unemployment.

“Besides, of course, to maintain daily life, (other measures have been taken) namely the provision of social assistance and community economic empowerment, which is annually budgeted by the government. That is part of tackling various workers who have been laid off or who do not have jobs,” he said.

Meanwhile, vice presidential spokesperson Masduki Baidlowi said that lay-offs in the digital industry, including start-ups, even at the unicorn and decacorn levels, are the result of business dynamics.

“That is not stopping digital transformation in Indonesia. We must remain optimistic. Unicorns and decacorns are currently building a runway, with various promos and subsidies for consumers and from discounts to free shipping; the aim is to enlarge the market base,” he explained.

Baidlowi said that the process of burning their large capital has led to the companies living off negative cash flows or depending on investor capital.

“The influence of the global economy forces companies to make efficiencies and also to maintain their runways. Lay-off is one of the alternatives. Of course, not all unicorns and decacorns do the same strategy, some grow positively, some are even ready to go public. It means that our digital transformation is still on track,” he added.

Apart from GoTo and Ruangguru, Shopee also announced its decision to lay off employees in Indonesia in mid-September, however, it did not disclose the number of job terminations.

Other technology start-ups that announced lay-offs in Indonesia include Koinworks, which shed 8 percent or 70 of its employees, Binar Academy, which laid off 20 percent of its employees, Xendit (Indonesian-Philippine company) 5 percent of its employees, Zenius 20 percent or 200 employees, LinkAja 33 percent or 200 employees, and SiCepat 0.6 percent or 366 employees.

 

Source: Antara News