Indonesia pledges no job cuts as SOEs shrink to 250

Jakarta (ANTARA) - The Indonesian government has pledged that its plan to reduce the number of state-owned enterprises (SOEs) to between 250 and 300 entities will not lead to layoffs of employees from dissolved companies.

The commitment was reiterated after President Prabowo Subianto reaffirmed his SOE restructuring target during the closing of the Indonesian Convention of Science, Technology, and Industry in Jakarta on Sunday, according to an official statement.

“Out of more than 1,000 SOEs, we have closed over 200 entities. Our ultimate objective is to shrink the number to around 300,” the president remarked.

Prabowo then asked SOE Regulatory Agency (BP BUMN) Head Dony Oskaria to confirm the target. Oskaria responded that the government was aiming for an even more ambitious goal of reducing the number of SOEs to 250.

The president welcomed the response and reiterated the importance of reforming Indonesia's SOE sector to curb state losses.

"Imagine, we will dissolve more than 750 SOEs. These entities have been operating with the people's money, yet instead of generating profits, they only use it to cover overhead costs," he said.

Prabowo added that restructuring SOEs is essential to enable Indonesia to maximize the value of its state assets for the benefit of the public. He said the restructuring process should be completed within the next two years.

Earlier, Oskaria assured the public that no employees would lose their jobs as a result of the restructuring.

"The President certainly does not want to see any layoffs," said Oskaria, who also serves as chief operating officer of Indonesia's sovereign wealth fund, Danantara.

He explained that Danantara is streamlining 1,077 SOEs, with the goal of reducing them to between 200 and 300 entities in 2026. According to him, the move is necessary to eliminate around Rp20 trillion (approximately US$1.1 billion) in annual losses incurred by 52 percent of SOEs.

"No employees will be laid off. They will remain employed under the consolidated entities," Oskaria said.

He added that the consolidation is expected to generate annual savings of around Rp50 trillion (nearly US$3 billion), significantly exceeding the estimated Rp2-3 trillion spent on employee salaries.

As an example, he cited savings of approximately US$700 million achieved through the merger of several sub-holdings under state energy company Pertamina.

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Translator: Prisca T, Tegar Nurfitra

Editor: M Razi Rahman

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