Due to dwindling worldwide orders from brands like Nike and Adidas, two large manufacturers in Tangerang, Victory Chingluh and Adis Dimension Footwear, have laid off a total of 3500 workers, putting strain on Indonesia’s footwear sector.
Since January, 2000 employees have been let off from Victory Chingluh, a division of Taiwan’s Ching Luh Group, at its Cikupa District facility. The company has plants in China and Vietnam and produces goods for companies like Adidas, FootJoy, Mizuno, Nike, and Reebok.
Nike’s changing approach to retail might be a contributing reason. The firm declared in 2023 that it will reduce expenses by up to $2 billion over a three-year period in order to “drive long-term profitability, accelerate innovation at scale, and fuel future growth.” Restructuring its organisation, boosting automation, and simplifying the product assortment are all components of this plan.
As part of cost-cutting measures, Nike’s long-time Indonesian manufacturing partner Adis Dimension Footwear laid off 1500 workers at its Balaraja District factory last year.
The head of the Banten Manpower and Transmigration Agency, Septo Kalnadi, clarified that these layoffs are not due to salary problems, but rather to a slower industry.
