A deepening economic crisis in Indonesia

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Hearing about layoffs has become rather commonplace over the past few years. There was a period of time where it seemed like you couldn’t go a day without reading about a company letting go of their employees somewhere, so much so that we actually started a layoff tracker back in 2021 to keep tabs on what’s been going on. (We still update it regularly, by the way.)

While these are headlines that cross our newsfeeds, I don’t think we actually realize the larger impact of these cuts. Tech in Asia’s tracker only keeps tabs on layoffs in the tech world, but jobs have also been cut across other industries.

Let’s look at Indonesia. In 2024, there was a 20.2% surge in mass layoffs across sectors, with 78,000 jobs wiped out. In January 2025 alone, 3,325 workers were left without paychecks.

There’s a much deeper crisis going on in Indonesia, especially in the manufacturing sector that has long been a vital part of its economy, as we’ll find in today’s premium story.

Today we look at:

• Indonesia’s faltering growth and its implications
• A semiconductor design firm looking to IPO in Malaysia
• Other newsy highlights such as Xiaohongshu’s cross-border ecommerce program and Capital A’s plans to sell BigPay

Premium summary

Swift action needed

Image credit: Timmy Loen

Indonesia is experiencing a surge in mass layoffs across various sectors. At the same time, President Prabowo Subianto is racing to reignite growth, but his plans could be in jeopardy.

• The big M: The biggest industry affected by these layoffs is the manufacturing sector. In 2002, it contributed 32% to Indonesia’s gross domestic product – that figure shrunk to just 18% in 2024.
• Going down, down: The ongoing wave of mass layoffs signals a deeper crisis of “premature deindustrialization” in Indonesia. This trend – where a country’s manufacturing sector is shrinking before it is fully industrialized – could erode household purchasing power even further.
• Bold moves: Analysts are proposing that the government introduce bold fiscal and monetary incentives to counter the economic slowdown. But whatever the government chooses to do, it’ll have to move fast.

Read more: Swift action needed as Indonesia’s growth falters

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