Tangerang. Two major footwear factories in Tangerang, Banten, which supply global sportswear brands like Nike and Adidas, have been forced to lay off thousands of workers as they struggle to survive amid sharply declining orders, a government official confirmed on Friday.

Victory Chingluh, located in Cikupa District, has cut around 2,000 jobs since January, according to Desyanti, head of industrial dispute settlement at the Tangerang Regency Manpower Department.

The company is part of Taiwan’s Ching Luh Group, which operates footwear manufacturing plants in China, Vietnam, and Indonesia.

"The company cited an oversized workforce and declining orders as reasons for the layoffs," Desyanti said.

Meanwhile, Adis Dimension Footwear eliminated 1,500 jobs last year as part of an aggressive cost-cutting strategy.

"Last year’s mass layoffs were driven by soaring operational costs and plummeting market demand. However, Adis Dimension Footwear has said that there are no immediate plans for further layoffs this year," Desyanti added.

Adis Dimension has been Nike’s exclusive manufacturing partner for the past three decades, operating on a 25-hectare factory site in Balaraja District, Tangerang.

In response to the challenges facing labor-intensive industries, the Indonesian government has announced a Rp 20 trillion ($1.3 billion) credit facility to help businesses stay afloat.

The credit program is available to industries such as textiles, garments, footwear, furniture, food and beverages, and toys. To qualify, companies must employ at least 50 workers.

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