Mass Layoffs Threaten Indonesia: Food and Beverage, Hospitality Sectors at Risk
- Istimewa
Jakarta, VIVA – Indonesia is once again facing a wave of mass layoffs. This time, the looming threat extends to the food and beverage industry as well as the hospitality sector.
In the food and beverage sector, Minister of Manpower Yassierli has addressed the recent layoffs at Fastfood Indonesia (KFC).
He stated that the ministry is currently awaiting an official explanation from KFC management regarding the termination of employees.
"We always strive to prevent layoffs. We will review the situation—I’m currently waiting for the report," Yassierli said at the Coordinating Ministry for Economic Affairs office in Jakarta on Thursday (Feb 27).
According to Yassierli, layoffs should always be a last resort for businesses. Therefore, the Ministry of Manpower will thoroughly assess whether KFC’s decision aligns with labor regulations.
Menteri Ketenagakerjaan Yassierli, Menaker Yassierli Raker dengan Komisi IX DPR
- VIVA.co.id/M Ali Wafa
"By law, layoffs should be the last option for companies. We intend to verify whether this step was justified," he added.
Meanwhile, Minister of Tourism Widiyanti Putri Wardhana has responded to concerns about potential job cuts in the hotel industry.
The Indonesian Hotel and Restaurant Association (PHRI) has warned of a possible layoff crisis due to government-led efficiency measures, which have caused a decline in hotel occupancy rates and tourism activity.
"We have coordinated with PHRI. While there are impacts, we believe they will be temporary. So far, there are no confirmed layoff plans, but we will continue discussions with them," Wardhana explained.
Protests Over KFC’s Alleged Unfair Layoffs
Fastfood Indonesia Workers' Struggle Union (SP-KFC), along with the Congress of Indonesian Trade Union Alliance (KASBI) staged protests against what they describe as unilateral and unfair layoffs by KFC management.
According to a statement from SP-KFC-KASBI, KFC Indonesia engaged in arbitrary terminations, discrimination, and alleged anti-union practices, targeting 11 union members and leaders.
The layoffs were carried out without consultation or negotiation, violating Constitutional Court Decision No. 168/PUU-XXI/2023.
"KFC Indonesia has shown arrogance and discrimination in its unilateral termination decision. The company failed to engage in proper discussions with the labor union, disregarding legal mandates," the statement read.
SP-KFC-KASBI further accused KFC of discriminating against union members by relocating certain staff while sparing others from a different, larger union (SPFFI).
Additionally, the union criticized KFC’s justification for the layoffs, citing financial losses. KFC reportedly offered only 0.5 times the severance pay, which contradicts Constitutional Court Decision No. 19/PUU-IX/2011.
"KFC cannot claim financial losses as a justification for these layoffs, especially since many KFC outlets across Indonesia remain operational," the statement emphasized.
Moreover, KFC allegedly neglected its obligations toward terminated employees. The company reportedly stopped paying BPJS health insurance contributions as of December 2024 while deliberately withholding wages for employees involved in labor disputes since September 2024.
This controversy has sparked wider discussions about labor rights and corporate accountability, with unions calling for government intervention and stronger protections for workers in Indonesia.
