Mass layoffs at Indonesian shoe factories may be isolated cases: Source

Taipei, March 10 (CNA) Recent large-scale layoffs at two footwear factories in Indonesia could be isolated cases, despite similar downsizing moves in the industry there, a Taiwanese member of the Jakarta Taiwan Entrepreneur Association told CNA.

In a recent interview, Jacky Tsai (蔡鎮雄), coordinator of the association's plastics division for footwear, said it was common for local shoe factories to adjust their workforce based on orders received, which vary from company to company.

Citing the expansion of several footwear groups into Central Java in recent years, Tsai said he felt the industry's business environment remained strong as the number and scale of footwear factories in Indonesia is growing.

He did not provide any figures to support that claim, however.

Tsai's comments came in response to local media reports that Indonesia's shoe manufacturing sector has seen about 3,500 workers laid off at two factories in Tangerang, a suburb of Jakarta.

The news was of particular interest to Taiwanese businesses because many of Indonesia's biggest footwear producers are Taiwanese owned.

Of the factories affected, about 2,000 were dismissed by Victory Chingluh, a subsidiary of the Taiwanese-owned Ching Luh Group, according to Desyanti, head of industrial dispute settlement in the Tangerang Regency Manpower Department, the Jakarta Globe reported.

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

Ching Luh, one of the world's leading sports footwear manufacturers, also operates in China and Vietnam, according to its official website.

Meanwhile, Adis Dimension Footwear, another major factory near Jakarta, accounted for the remaining 1,500 layoffs in late 2024, which Desyanti attributed to "soaring operational costs and plummeting market demand."

In another sign of an industry in turmoil, the largest textile manufacturer in Indonesia, Sritex, ceased operations in March, leaving nearly 11,000 workers jobless.

Among the factors contributing to the company's downfall was a surge in cheap textile imports from China.

Indonesia fears those cheap imports may accelerate under U.S. President Donald Trump's tariffs, with China dumping products that it can no longer sell to the United States, according to foreign media reports.