In 2024, Indonesia has been grappling with a severe wave of layoffs, known locally as "Gelombang PHK" (Pengurangan Hubungan Kerja), particularly in the labor-intensive manufacturing sector. According to reports, the number of affected workers is estimated to have reached between 50,000 and 100,000 since the beginning of the year [1].
This situation has been exacerbated by the closure of factories that can no longer compete in the domestic market, despite ongoing consumer demand. Ristadi, President of the Confederation of Indonesian Workers' Unions (KSPN), highlighted that if the government does not intervene, this trend could continue, particularly in the textile and footwear industries [2].
Given this context, the role of Human Resources (HR) becomes more critical than ever. HR professionals are not only tasked with managing the layoff process but also with empowering those who have been laid off. This article explores how HR can play a pivotal role in supporting and empowering laid-off employees during these challenging times.
Understanding the "Gelombang PHK" of 2024
The "Gelombang PHK" of 2024 has been marked by a series of significant layoffs across various sectors in Indonesia, with the manufacturing sector being particularly hard hit. Recent closures, such as that of PT Sepatu Bata Tbk in Purwakarta, West Java, which led to the layoff of 200 workers, highlight the ongoing challenges facing the domestic workforce [3]. Additionally, the technology sector has not been immune, with reports of layoffs at Tokopedia following its merger with Bytedance [4].
According to Nailul Huda, Director of the Digital Economy at the Center of Economic and Law Studies (Celios), the surge in layoffs is largely due to the fragile state of Indonesia’s domestic economy. Despite a stable GDP growth rate of around 5%, the performance of the manufacturing sector has been less than satisfactory, with a decreasing share of GDP and limited job creation [5].
One of the key indicators of this economic fragility is the poor performance of domestic industries, particularly in the textile and textile products (TPT) sector. This sector has been severely impacted by the influx of cheaper imported goods, especially from China. The availability of these affordable products has driven domestic consumers away from local goods, leading to a decline in demand for Indonesian-made TPT products [6].
The situation is further exacerbated by a decline in demand from the United States, which is a major export market for Indonesia’s TPT sector. This reduced demand, coupled with competition from Chinese products in international markets, has led to a significant downturn in domestic production, resulting in mass layoffs [7].
As of mid-2024, it is estimated that approximately 13,800 workers have been laid off in the TPT sector alone, affecting 10 factories across West Java, Central Java, and East Java [8]. The technology sector has also seen its share of layoffs, as evidenced by the recent job cuts at Tokopedia, which were driven by restructuring efforts following the company’s acquisition by Bytedance [9].
The widespread nature of these layoffs is reflected in the sharp increase in claims for the BPJS Ketenagakerjaan’s Old Age Security (JHT) Program. Between January and April 2024, BPJS Ketenagakerjaan processed 892,000 JHT claims, amounting to Rp 13.55 trillion, with the majority of these claims being filed by workers who either resigned or were laid off [10].
This combination of domestic economic challenges, competition from cheaper imports, and declining export demand has created a perfect storm, leading to the current wave of layoffs and underscoring the need for robust HR strategies to support affected employees.
The Role of HR in the Layoff Process
Traditionally, HR's role in layoffs has been viewed as primarily administrative—ensuring compliance with legal requirements, managing severance packages, and conducting exit interviews.
However, in the context of the "Gelombang PHK" of 2024, this role must evolve to encompass a more empathetic and supportive approach. HR professionals have the opportunity to help laid-off employees transition smoothly into the next phase of their careers, thus minimizing the negative impact of job loss.
Empowering Laid-Off Employees
Communication and Transparency One of the most crucial aspects of HR's role during layoffs is communication. Clear, honest, and timely communication can help mitigate the shock and uncertainty associated with job loss.
HR should ensure that employees understand the reasons behind the layoffs and the criteria used to determine who would be affected. This transparency fosters trust and helps employees feel respected, even in difficult circumstances.
Providing Emotional Support The emotional toll of being laid off cannot be underestimated. HR can play a crucial role in offering emotional support to affected employees. This can be done by providing access to counseling services, either through Employee Assistance Programs (EAPs) or by partnering with external mental health professionals. Offering workshops or seminars on stress management and coping strategies can also be beneficial.
Career Transition Assistance
Empowering laid-off employees means helping them transition to new opportunities. HR can provide resources such as resume-writing workshops, interview coaching, and job search assistance. Collaborating with recruitment agencies or career coaches to offer personalized guidance can further enhance the support provided to former employees.
Skill Development and Training In today’s rapidly changing job market, upskilling and reskilling are essential for laid-off employees seeking new opportunities. HR can organize training sessions focused on in-demand skills, such as digital literacy, project management, and other industry-specific competencies. By offering these resources, HR not only empowers employees to adapt but also increases their employability.
5. Entrepreneurial Support
For some laid-off employees, entrepreneurship may be a viable path forward. HR can offer workshops on starting a business, financial planning, and accessing startup resources. By encouraging and supporting entrepreneurial endeavors, HR can help employees explore alternative career paths.
The "Gelombang PHK" of 2024 presents significant challenges for both companies and employees in Indonesia. However, by adopting a proactive and compassionate approach, HR can transform these challenges into opportunities for empowerment. By focusing on clear communication, emotional support, career transition assistance, skill development, networking, entrepreneurial support, and alumni networks, HR can help laid-off employees navigate this difficult period and emerge stronger.
The role of HR is no longer limited to administrative tasks; it has evolved to encompass a more holistic approach to employee well-being. In times of crisis, such as the "Gelombang PHK," HR professionals have the unique opportunity to make a lasting positive impact on the lives of those affected by layoffs, helping them rebuild their careers and regain their confidence.
References :
CNBC Indonesia. (2024). "Parah! Diduga Sudah 100.000-an Pekerja Pabrik RI Jadi Korban PHK 2024.
Kontan.co.id. (2024). "Gelombang PHK Kembali Terjadi, Ini Sebabnya Menurut Pengamat."
Ministry of Manpower Indonesia. (2024). "Economic Challenges and Workforce Reductions: The 2024 Layoff Wave.
Dessler, G. (2021). Human Resource Management (16th ed.). Pearson.
Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2020). Human Resource Management: Gaining a Competitive Advantage (11th ed.). McGraw-Hill Education.
Employee Assistance Professionals Association (2024). "The Role of EAPs in Supporting Laid-Off Employees."
Career Development Institute. (2024). "Best Practices for Outplacement Support".
McKinsey & Company. (2024). "Reskilling in the Age of Automation: The 2024 Perspective."
Society for Human Resource Management (SHRM). (2024). "HR's Role in Facilitating Networking for La
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