Jakarta. President Prabowo Subianto is planning to assemble a team to deal with Indonesia’s unemployment, which could rise as US tariffs loom. A senior economist said Tuesday the task force should make sure that the displaced workers get their severance checks.

As Indonesia tries to negotiate US tariffs, Prabowo has ordered the establishment of a task force to connect laid-off workers with job opportunities. Estimates by think tank Celios revealed that the upcoming 32 percent levy on US-bound goods could cause about 1.2 million Indonesians to lose their jobs this year. Laid-off workers are entitled to compensation, although the amount varies depending on how long they have worked at the company. The longer an employee works, the bigger the severance pay. Indonesia is also just a few days away from May Day, which commemorates the working class’ struggle, and the commemoration brings attention to unpaid severance checks. 

“Many companies do not pay their severance packages or even the workers’ remaining salary. The lack of data on the Indonesian labor force and no strict sanctions against violating employers are some serious problems we need to address,” analyst Bhima Yudhistira told the Jakarta Globe. 

“The upcoming task force should accurately keep track of who gets laid off, be it those in the formal or informal sectors. We can make use of this data as a basis so they can get compensated for the job termination,” he said. 

According to Bhima, full-time workers are prone to layoffs as employers in Indonesia favor interns and outsourcing or contracting out. Outsourcing means hiring third-party providers to perform certain tasks, thus less pay. Interns, too, commonly earn wages that are barely enough to cover the transportation costs. Bhima added: “Companies might come up with an excuse that they were trying to suppress costs, but some actually try to avoid the responsibility of having to fulfill the [economic] rights of full-time workers.”

Approximately 200,000 workers will gather at Jakarta’s National Monument on May Day, which falls on Thursday. Labor union KSPI’s chief Said Iqbal recently told reporters that workers would urge the government to not only set up a layoff taskforce, but also get rid of the outsourcing system. Said also claimed that Prabowo would address the rallygoers in person. 

The Manpower Ministry reported that around 18,610 people lost their jobs in the first two months of 2025. They mostly worked in Central Java, which saw 10,677 individuals getting laid off over the said period.

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