AI and the Threat of Layoffs in Indonesia: How Real Is the Risk?
More than 42,000 Indonesian workers lost their jobs by mid-2025, with AI adoption often cited as a contributing factor, although global economic conditions also played a major role.
AI adoption in Indonesia has reached 92 percent, but its use for productivity remains low; exposure to automation risk is only around 14.1 percent compared with other ASEAN countries.
Repetitive jobs such as cashiers and tellers are the most vulnerable to being replaced by AI, while creative and analytical sectors are more resilient. The main challenges are the skills gap and the urgent need for large-scale reskilling.
More than 42,000 Indonesian workers lost their jobs in mid-2025. In the United States, layoffs surpassed 806,000 in the first seven months of the same year. Behind both numbers, one name keeps coming up: artificial intelligence, popularly known as AI.
But is AI really the culprit? Or are we watching a fear larger than the actual threat?
Layoffs Are Surging, and AI Is Not the Only Cause
The global world of work is in turmoil. According to a report by the career firm Challenger, Gray & Christmas, more than 806,000 jobs were cut in the US through July 2025, a figure exceeding the total layoffs across all of 2024 at 761,358. In the tech sector alone, 72,000 employees lost their positions in the first six months of 2025, according to Layoffs.fyi data compiled by Anadolu Agency.
Big names are on this list. Microsoft cut 12,000 positions in the first half of 2025, including 3,000 in May, then announced plans for an additional reduction of 9,000 employees. Intel, PayPal, and HP did the same. The reasons are uniform: efficiency, digital transformation, and AI adoption.
Indonesia feels the pressure too. Ministry of Manpower data as of mid-2025 recorded more than 42,000 workers laid off, while national unemployment still sits at 7.28 million people. The surge in layoffs in the first half of 2025 reached 32.19% compared with the same period the previous year. Bukalapak is one of the clearest examples. The company carried out a major restructuring that reduced a number of employees as it integrated automation into its operations.
But analysts warn that AI is not the only factor. Tariff wars between countries, geopolitical instability, and high interest rates also worsened conditions. Automation only accelerates an efficiency drive companies already wanted, rather than creating pressure from zero.
Indonesia: Vulnerable, but Not Yet on the Front Line
The global numbers do feel frightening. But Indonesia's position on the AI risk map is actually more complex than simply being "affected too."
According to data from the Ministry of Communication and Digital Affairs (Komdigi) as of February 2026, the AI adoption rate in Indonesia has reached 92 percent. However, Minister Meutya Hafid stressed that this high adoption figure has not been matched by productive use. "Even with 92 percent AI adoption, the use of AI for productivity in Indonesia remains minimal," Meutya said at the graduation event for the Google for Startups Accelerator program in Jakarta on 24 February 2026.
In other words, AI is already very widely used by Indonesians, but most of that use has not translated into economic value creation or real productivity gains. This is precisely the gap that becomes the challenge: high adoption without high productivity means AI's potential is untapped, while the risk of workforce disruption keeps running.
As supporting data, Anthropic's 2025 research titled Labor Market Impacts of AI: A New Measure and Early Evidence, cited by Suar.id measures the observed exposure of AI to the world of work. By this metric, AI exposure in Indonesia stood at 14.1 percent, placing Indonesia in the middle of the ASEAN region, below the Philippines (20.1 percent) but above Thailand (12.4 percent), Laos (7.8 percent), and Cambodia (5.7 percent). This low exposure figure reflects the character of Indonesia's labor market, still dominated by the informal sector and physical fieldwork.
The combination of these two data points paints an interesting picture: Indonesians adopt AI quickly as users, but their exposure to the risk of job automation is still relatively low compared with neighbors like the Philippines. This is not unconditional good news but a narrow pause before the next wave arrives.
Which Jobs Are Most at Risk?
Not all jobs carry the same risk. Based on a number of reports published in 2025 and 2026, the pattern of threat divides fairly clearly.
The most vulnerable jobs are those that are repetitive and rule-based. Supermarket cashiers and bank tellers have felt the most tangible impact, as self-checkout systems and digital banking apps spread. After them, data entry clerks, toll gate operators, and office receptionists follow, because their job descriptions can be translated into algorithms.
Entry-level accounting also makes this list. Bookkeeping, basic tax calculation, and transaction categorization can now be done by software faster and more accurately than humans. This finding aligns with McKinsey's analysis, which identifies collecting and processing data as one of the categories most easily automated by machines, with the potential to displace many workers in fields such as bookkeeping, paralegal work, accounting, and back-office transaction processing.
But there is an interesting irony here. The creative, analytical, and relational sectors, long considered the "soft" ones, turn out to be more resistant to automation. This is not because AI cannot touch them, but because the value of the work lies in judgment, empathy, and context, the things machines cannot yet measure and replicate consistently. McKinsey notes that automation has a smaller impact on work involving managing people, applying expertise, and social interaction.
Two Sides of the Same Coin
The narrative about AI and layoffs often stops at the frightening numbers. Yet the full picture is far more nuanced than that.
On the other side of the 244,851 global tech layoffs throughout 2025, investment in AI companies is in fact breaking records. Global startups raised USD 297 billion in the first quarter of 2026 alone, according to a report cited by the Indonesian Artificial Intelligence Association. Deloitte and JPMorgan project that the AI and cloud computing market will grow, with average global investment rising 29 percent per year through 2028.
In Southeast Asia, AI could affect 164 million workers (around 57 percent of the region's workforce), with women and Gen Z bearing the heaviest burden: more than 70 percent of female workers and up to 76 percent of young workers are in roles that will be automated or disrupted, citing an Access Partnership report (17 January 2025) via Modern Diplomacy. The problem is not merely whether jobs disappear, but the gaping skills gap: most affected workers do not have the capabilities needed to fill the new roles that emerge. This is not a small paradox but a structural gap that, if left unaddressed, will widen inequality rather than narrow it.
The long-term projection remains serious. Oxford Economics, in a joint report with Cisco titled Technology and the Future of ASEAN Jobs, estimates technology will displace around 28 million workers in the ASEAN region by 2028. But the report stresses that jobs tend to evolve rather than vanish entirely, so the biggest challenge is not job loss but the need for massive reskilling of the regional workforce.
McKinsey's long-term projection reinforces this picture. In its Jobs Lost, Jobs Gained report, McKinsey estimates that between 400 million and 800 million people worldwide could be displaced by automation by 2030. Of those, 75 million to 375 million may need to switch job categories and learn new skills, rather than lose their jobs permanently. This distinction matters: the main challenge is not the disappearance of jobs but the workforce's readiness to transition into new roles.
What Is Really at Stake
Indonesia has a pause. The still relatively low AI exposure rate provides room, but that room is neither free nor permanent. Especially with AI adoption already at 92 percent, the public is already familiar with the technology. What has not matured is its use for productivity and readiness to face its disruption.
What is needed now is not panic, but precision. We need precision in mapping which sectors are most vulnerable in the next five years. We also need precision in designing reskilling programs that genuinely target threatened workers, not only those already ready to learn. Finally, we need precision in regulation, so that corporate AI adoption does not shift the burden onto the workforce without an adequate safety net.
So the real question is not "will AI take our jobs?" The question is who decides who gets those new jobs, and whether that decision is being made now or waiting until it is too late.
Sources
Ministry of Manpower of the Republic of Indonesia. Layoff data January to June 2025 via the Satudata Kemnaker platform (42,385 workers, up 32.19%). Cited via VIVA.co.id and Republika.
Ministry of Communication and Digital Affairs (Komdigi). Indonesia AI adoption rate of 92 percent, statement by Minister Meutya Hafid, 24 February 2026.
Challenger, Gray & Christmas. United States layoff report through July 2025 (806,383 jobs, up 75% YoY).
RationalFX via Network World. Global tech sector layoffs 2025 (244,851 jobs).
Anthropic. (2025). Labor Market Impacts of AI: A New Measure and Early Evidence. Observed exposure metric, Indonesia AI exposure of 14.1% and ASEAN comparison. Cited via Suar.id.
Access Partnership. (17 January 2025). The impact of AI on 164 million Southeast Asian workers. Cited via Modern Diplomacy.
McKinsey Global Institute. Jobs Lost, Jobs Gained: What the Future of Work Will Mean for Jobs, Skills, and Wages.
Oxford Economics & Cisco. (2018). Technology and the Future of ASEAN Jobs. Technology displaces around 28 million ASEAN workers by 2028; jobs evolve rather than disappear.
