Mass layoffs and deflation cast a shadow over holiday celebrations as industries struggle.

For Mr Sriyono, 52, this year’s Eid al-Fitr will be far from joyful. Like many Indonesians, he has only one name, and after spending 33 years working at PT Sri Rejeki Isman (Sritex), he now faces unemployment following the textile giant’s bankruptcy ruling on 26 February.

“I never imagined this happening… I stayed because the company felt like home. Now, I’m at a loss for words,” he shared. His role involved serving beverages to foreign buyers visiting the factory in Solo, Central Java.

Factory Closures Leave Thousands Jobless
Sritex, once the largest textile manufacturer in Southeast Asia, is among at least 60 textile firms in Indonesia that have shut down between early 2023 and late 2024, according to the Indonesian Fiber and Filament Yarn Producers Association.

The crisis extends beyond textiles, with major manufacturers such as Yamaha Music, electronics firm Sanken, and Danbi International—producer of artificial eyelashes—also ceasing operations in early 2025. The Indonesian Trade Union Confederation reported that between January and February alone, 60,000 workers from 50 companies were dismissed.

The outlook remains bleak, with projections from Indonesia’s Parliamentary Expertise Agency estimating that 280,000 workers will lose their jobs in 2025—the highest figure since the COVID-19 pandemic, which saw 3.6 million unemployed in 2020.

Economic Turmoil & Government Policies
Economists attribute these layoffs to a lack of government protection for domestic industries.

“The administration prioritises attracting new investors rather than safeguarding existing businesses,” said Bhima Yudhistira, executive director of the Centre of Economic and Law Studies. He highlighted that recent policy changes, including relaxed import restrictions and tax breaks, have facilitated an influx of cheaper Chinese textiles, undercutting local manufacturers.

Adding to the economic strain, Indonesia recorded its first deflation in over 20 years, with consumer prices dropping by 0.09% year-on-year in February, according to the Central Bureau of Statistics (BPS). While officials attribute this to temporary factors, such as electricity tariff adjustments, analysts warn it signals declining consumer and business spending.

Despite Indonesia achieving 5.03% economic growth in 2024, forecasts for 2025 remain below the government’s 8% target. In response, the administration has rolled out stimulus measures, including 445.5 trillion rupiah (£22 billion) in social aid, tax cuts, and industry incentives. Additional subsidies for Eid, such as discounted flights and toll fees, have been introduced to encourage spending.

Uncertain Future for Affected Workers
The government insists the labour market remains stable. On 5 March, Minister of Manpower Professor Yassierli assured that displaced Sritex workers would receive financial support.

However, for Sriyono and his family of three, immediate concerns take priority. With his final salary of 2.3 million rupiah (£115), he is torn between keeping Eid traditions alive and ensuring his family’s survival beyond the celebrations.

“Eid comes once a year, and we always celebrate… but this time, we must be careful with every rupiah,” he said.