Jakarta: Recent large-scale layoffs at two footwear factories in Indonesia may be isolated cases, despite similar downsizing moves in the industry, a Taiwanese member of the Jakarta Taiwan Entrepreneur Association told CNA. In a recent interview, Jacky Tsai, 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.

According to Focus Taiwan, Tsai cited the expansion of several footwear groups into Central Java in recent years, expressing that the industry's business environment remained strong as the number and scale of footwear factories in Indonesia is growing. However, Tsai did not provide any figures to support that claim. His 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 particularly significant to Taiwanese businesses because many of Indonesia's largest footwear producers are Taiwanese-owned. Of the factories affected, about 2,000 workers 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, as reported by the Jakarta Globe. "The company cited an oversized workforce and declining orders as reasons for the layoffs," Desyanti said.

Ching Luh, a leading global sports footwear manufacturer, 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 indication of an industry in turmoil, the largest textile manufacturer in Indonesia, Sritex, ceased operations in March, leaving nearly 11,000 workers jobless. The company's downfall was partly due to a surge in cheap textile imports from China. Indonesia fears these 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.