Nandito Putra, Jakarta – A short video showing hundreds of uniformed employees of PT Gudang Garam Tbk shaking hands in an emotional atmosphere has gone viral on social media since Saturday afternoon, September 6, 2025. The video contains a written statement that reads, "PT Gudang Garam mass layoffs, the job market is not in good shape."
The video, uploaded by the @info_loker_kediri Instagram account, depicts hundreds of workers wearing white and maroon Gudang Garam uniforms gathered in a hall. The emotional atmosphere is apparent as the workers shake hands and embrace each other.
This news was promptly addressed by the President of the Indonesian Trade Union Confederation (KSPI), Said Iqbal. He stated that the organization is still verifying the authenticity of the layoff reports at the publicly listed cigarette company based in Kediri, East Java.
"We have just received reports of mass layoffs at PT Gudang Garam. We will verify it first," Iqbal said in a written statement on Saturday, September 6, 2025.
If the reports prove to be true, according to Iqbal, this mass layoff reflects the intense pressure on the cigarette industry. He is concerned that the impact could extend to related sectors, from tobacco farmers and logistics workers to drivers, small traders, and even boarding house owners. "It's possible that hundreds of thousands of workers are at risk of losing their jobs," he said.
Iqbal urged the central and regional governments to intervene immediately and provide a solution. "Save the national cigarette industry while still maintaining health campaigns," he added.
As of the time of writing, Tempo is still trying to confirm the layoff reports. Gudang Garam's Corporate Communication Manager, Fitriani Y. Wardhani, has not yet responded to requests for confirmation or questions sent to her mobile number.
Gudang Garam's financial performance under strain
PT Gudang Garam's financial performance was previously reported to be under pressure. Based on information disclosed to the Indonesia Stock Exchange (BEI) in June 2025, the net profit of the company, which is publicly traded under the ticker GGRM, was Rp980.8 billion in 2024. This figure represents an 81.57 percent drop from 2023, when the company's net profit reached Rp5.32 trillion.
In addition, the company has also reduced its purchase of tobacco. In 2024, Gudang Garam stopped buying tobacco from Temanggung, a policy that continued into 2025.
The Regent of Temanggung, Agus Setyawan, stated that Gudang Garam's management had informed him that the company's tobacco stock was abundant, sufficient for production needs for the next four years. "So, it's no longer conducive to buy raw materials, especially from Temanggung," Agus said in a phone call on Monday, June 16, 2025.
The decrease in tobacco procurement is due to a decline in cigarette sales. An increase in excise duties has caused cigarette prices to rise, while consumers have increasingly switched to cheaper products, including illegal cigarettes.
According to Agus, Gudang Garam now has to compete fiercely with small and medium-scale producers who can sell cigarettes at lower prices. The situation is compounded by the proliferation of illegal cigarettes.
The Indodata Research Center noted that in 2024, the circulation of illegal cigarettes reached 46 percent of total consumption. The most dominant type is untaxed, plain-packaged cigarettes, which constitute 95.44 percent of total illegal circulation. The potential loss to the state due to the spread of illegal cigarettes is estimated at Rp97.81 trillion.
The Executive Director of Indodata, Danis Saputra Wahidin, said the trend of illegal cigarette circulation has increased sharply since 2021. "Research shows that the circulation of illegal cigarettes has increased from 28 percent to 30 percent, and by 2024, it had reached 46 percent," he said, as quoted by Antara.
– Ananda Ridho Sulistya contributed to the report
Source: https://en.tempo.co/read/2046752/gudang-garam-reportedly-faces-mass-layoff