In total, 3,500 jobs have disappeared at two major factories in the country since Jan.
Declining international orders from global brands, including Nike and Adidas, are having a significant impact on the footwear industry of Indonesia. Two major factories in Tangerang – Victory Chingluh and Adis Dimension Footwear – have cut a combined 3,500 jobs as falling sales are shrinking the needs of global brands.
Victory Chingluh, a subsidiary of Taiwan’s Ching Luh Group, has been downsizing since January, laying off 2,000 workers at its factory in Cikupa District.
The company also has factories in China and Vietnam and produces for brands such as Adidas, FootJoy, Mizuno, Nike and Reebok.
According to Tangerang Regency Manpower Department official Desyanti, the company attributes the decision to “rising operating costs and a sharp drop in market demand.”
Nike’s evolving retail strategy may be a contributing factor. In 2023, the company announced plans to cut up to $2 billion in costs over three years to “drive future growth, accelerate innovation at scale, and improve long-term profitability.” This strategy includes streamlining product assortments, increasing automation, and restructuring its organization.
