President Targets State Firms Down to 250, Dony Assures No Layoffs

President Prabowo Subianto is accelerating the consolidation of Indonesia's state-owned enterprises (BUMN), targeting a reduction from over 1,000 to approximately 250 companies. This strategic move aims to streamline operations, cut high overhead costs, and enhance efficiency across the sector. The government has already closed more than 200 BUMNs and plans to complete the transformation within two years.

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From over a thousand SOEs, we have now closed more than 200. Later we will make it around 300.

During a national consultation, President Prabowo questioned the Chief Operating Officer of the BUMN management body, Dony Oskaria, about the final target number of companies. Oskaria confirmed the goal of around 250 BUMNs, emphasizing that the consolidation is necessary because many of the current enterprises are not profitable and burden the state with significant operational expenses. "Imagine, we closed more than 750. This is all people's money. Companies are not making a profit, only paying overhead," the President stated.

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The end result will be around 250, Sir.

Crucially, Dony Oskaria assured that the extensive restructuring process will not result in any job losses. He explained that all employees from the closed or consolidated companies will be retained and integrated into the resulting entities. Oskaria highlighted that the cost of employee salaries is significantly lower than the potential savings from restructuring. "We calculate, the labor cost per year is only Rp 2 to Rp 3 trillion. If so, I'll just take all the employees, I'll still save Rp 47 trillion," he said, underscoring the financial logic behind retaining staff.

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Imagine, we closed more than 750. This is all people's money. Companies are not making a profit, only paying overhead.

The consolidation aims to create more efficient state-owned companies that can deliver greater benefits to the public. Oskaria mentioned that approximately 52 percent of current BUMNs are operating at a loss, accumulating a total deficit of around Rp 20 trillion. This rationalization is seen as a critical step to improve governance and financial performance, ensuring these enterprises serve the nation more effectively. The process is expected to be finalized by 2026.

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Definitely, the President does not want any layoffs.