🔑 Key Takeaways
- PT Pakerin in Mojokerto is set to lay off 2,500 employees in 2026, driven by industrial restructuring and the adoption of automation technology for efficiency.
- The Ministry of Industry (Kemenperin) has expressed readiness to support affected workers through reskilling programs, job matching, and job loss insurance schemes.
- The government emphasizes the importance of industrial transformation towards more efficient and sustainable production models, while ensuring social protection for the workforce.
MOJOKERTO, East Java – The wave of structural change in Indonesia's manufacturing sector continues to make its impact felt in 2026. PT Pabrik Kertas Indonesia (Pakerin), one of the leading paper producers in Mojokerto, East Java, has announced plans to lay off 2,500 employees. This decision has garnered serious attention from the Ministry of Industry (Kemenperin), which has reaffirmed its commitment to finding long-term solutions for the affected workers.
Automation and Efficiency: The Core Drivers of 2026 Industrial Restructuring
The restructuring undertaken by PT Pakerin is described as a response to increasingly competitive global market challenges and the need to enhance operational efficiency. “This is part of our adaptation strategy to the continuously evolving paper industry landscape, especially with the surge in automation and Artificial Intelligence (AI) technology adoption in production processes,” explained an internal company source who requested anonymity. They added that significant investment in automation machinery for certain production lines is a crucial step to maintain the company's competitiveness in the 2026 market.
This phenomenon is not new. Since the early 2020s, many manufacturing industries, including textiles, automotive, and paper, have faced pressure to adopt advanced technologies for efficiency and faster production. However, the unavoidable consequence is a reduction in the need for manual labor.
Proactive Measures by the Ministry of Industry
Responding to the news, Kemenperin promptly issued a statement. The Director-General of Resilience, Regional, and International Industrial Access (KPAII) at Kemenperin, Mr. Adi Nugroho, expressed deep concern during a virtual press conference in mid-February 2026. “We are very aware of the challenges faced by PT Pakerin and its impact on thousands of workers. Kemenperin will not stand idly by,” Mr. Adi asserted.
He further elaborated that Kemenperin, in coordination with the Ministry of Manpower and local governments, is preparing a series of intervention programs. These include the 'Industrial Competency Enhancement Program 4.0', which will focus on reskilling and upskilling affected workers in areas relevant to future industry needs, such as data analytics, automated machine maintenance, and green technologies. “We will also facilitate job matching with growing industries that require new talents, and optimize the Job Loss Insurance Scheme (JKP) which has been updated for 2026,” Mr. Adi added.
Navigating the Future of Industry and Worker Welfare
Senior economist from Gadjah Mada University, Dr. Citra Dewi, who frequently observes Indonesia's industrial transformation, offered her perspective. “The situation at Pakerin reflects a global trend. Automation indeed reduces the need for manual labor, but it also opens up opportunities for new, higher-value jobs. The challenge lies in how the government and industry can collaborate to accelerate this transition fairly,” she stated.
The Indonesian government, through Kemenperin, is committed to continuously encouraging investment in innovative and sustainable industrial sectors, which are expected to absorb new skilled labor. This transformation, while painful in the short term, is anticipated to strengthen Indonesia's economic foundations and create a more resilient and competitive industrial ecosystem in the global market for 2026 and beyond.
Frequently Asked Questions (FAQ)
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Q: What is the primary reason for the mass layoffs at PT Pakerin?
A: The layoffs are due to company restructuring in response to global competition and the adoption of automation and Artificial Intelligence (AI) technologies to enhance operational efficiency in 2026. -
Q: What steps is Kemenperin taking to assist affected workers?
A: Kemenperin is preparing reskilling and upskilling programs through the 'Industrial Competency Enhancement Program 4.0', facilitating job matching, and optimizing the Job Loss Insurance Scheme (JKP). -
Q: Is this a trend expected to continue in Indonesian industries?
A: Yes, experts predict that the adoption of automation and advanced technologies will continue as part of Industry 4.0 transformation, creating both challenges and new opportunities for the workforce in Indonesia.
