BATAM. United States-based oil-industry support company PT McDermott Indonesia laid off 1,200 workers in Batam, Riau Islands, in the period between May and June, the largest number of layoffs since it began operations in 1973.
Batam Manpower Agency head Rudi Syakyakirty said on Wednesday that the company had reported that the move was made because of deteriorating business conditions in the island.
“The layoffs were implemented because there were no orders,” Rudi told The Jakarta Post, adding that the layoffs had been conducted properly.
The company, whose factory occupies a 107-hectare site, still employs some 1,000 workers, the official said.
Rudi said McDermott, which used to employ up to 10,000 workers in Batam, did not report any plan to close its factory on the island.
However, he admitted that since July 2016 some 46 businesses had closed because of the economic slowdown, causing some 3,000 people to lose their jobs. “Those small companies had to close because they had no work,” he added.
Spokesman for Batam Free Trade Zone Andiantono Purnomo said the layoffs were caused mainly by the decline in oil prices. “If the oil price picks up, McDermott’s business will recover again,” he said.
Meanwhile, PT McDermott Indonesia general affairs manager Raja Muhammad Amin declined to comment on the issue, saying he had no authority to talk to reporters.
Editor: Wahyu Rahmawati