The year 2025 in Indonesia began with unsettling news: more than 70,000 people in Indonesia lost their jobs in just the first three months.
Data from two credible institutions show high layoff numbers in the first quarter of 2025. According to the Indonesian Employers Association (Apindo), 73,992 workers were laid off by March 2025. Meanwhile, the Ministry of Manpower (Kemnaker) recorded 24,036 layoff cases by April 2025.
This significant data gap sparked public discussion. However, both sources agree on one crucial point: the layoff trend in Indonesia is rising.
A Warning Alarm from the Rising Layoff Numbers
The question lingering in many Indonesians’ minds right now is: why has the wave of layoffs in early 2025 become so massive?
To understand the root of the issue, Apindo conducted a survey among business owners in Indonesia. The results revealed that 69.4% of respondents admitted layoffs were due to declining demand for products and services.
This drop in demand disrupted company operations, as production outputs were no longer absorbed by the market. As a result, many business owners were forced to take the last resort, which is employee layoffs, as a way to keep their companies afloat.
Looking Into the Cause of Declining Demand
So, what exactly is causing the drop in demand for certain products and services?
One key phenomenon to understand is precautionary saving, which refers to people’s tendency to save money rather than spend it. The main reason behind this behavior is economic uncertainty.
Since the pandemic, many Indonesian households have become more cautious. As inflation rises, purchasing power weakens, and prices remain high, people choose to cut back on spending just to survive. On top of that, widespread news of layoffs across Indonesia has further shaken the public’s sense of economic security. As household consumption declines, which is the main driver of national economic growth, the economy begins to slow down.
Richard W. Tresch (2015), in his public economics theory, explains that precautionary saving is a natural response to uncertain future risks. In other words, it’s not just about frugality. It’s a form of survival amid uncertainty.
In unpredictable times like these, individuals must adapt quickly. One of the most important forms of adaptation is increasing one’s personal value and skill set to remain relevant in the job market.
As companies become more selective, efficiency becomes a priority. Only individuals who stand out, which is those with continuously evolving skills and high adaptability, will be able to survive and thrive. That’s why it is crucial to keep sharpening your skills, building your portfolio, and enhancing your personal brand to stay competitive in today’s ever-changing landscape.
