Malaysia’s labour market shows resilience amid rising retrenchments

Malaysia’s workforce is navigating a complex period, with rising retrenchment numbers drawing government attention even as robust hiring activity and a falling unemployment rate point to an underlying market that remains broadly healthy. The country’s unemployment rate eased to 2.9% in the latest reporting period, with the labour force participation rate climbing to 70.9%.

Yet beneath these headline numbers, a more nuanced picture is emerging. Economy Minister Datuk Seri Akmul Nasrullah Mohd Nasir raised the alarm over a month-on-month rise in retrenchments, with 7,057 employees losing their jobs in April—a 21% increase from the 5,855 recorded in March. Speaking at a briefing on the global supply chain crisis following a National Economic Action Council (NEAC) meeting, Akmal acknowledged that the figure remained below the peaks seen earlier in the year—10,658 in January and 7,512 in February—but stressed that the uptick could not be overlooked. “Although this figure is lower compared with earlier this year, this development needs to be given attention. Every single figure represents a family that has lost its source of income,” he said.

The weight of those losses is falling disproportionately on the country’s economic heartlands. According to Hong Leong Investment Bank, citing data from the Social Security Organisation (Perkeso), Selangor accounted for 29.3% of total loss of employment cases in March, with Kuala Lumpur contributing a further 25.6%—together representing more than half of all retrenchments nationwide. In response, the minister reaffirmed the government’s commitment to deploying existing support infrastructure for affected employees, specifically the Employment Insurance System, which provides financial assistance and job placement services to retrenched employees while they seek new employment.

READ MORE: CHRO Malaysia 2026: Elevating the HR function to the heart of business strategy

On the demand side, the picture is considerably more encouraging. Data from the Department of Statistics Malaysia (DOSM) shows that 587,801 job vacancies were advertised online in Q4 2025, with the number of organisations actively recruiting rising from 77,615 to 80,287 quarter-on-quarter. Chief Statistician Datuk Seri Dr Mohd Uzir Nahidin noted that professional roles dominated the hiring landscape, accounting for 46.4% of all online job postings, or 272,698 openings, followed by technicians and associate professionals at 93,358 and managers at 88,080. At a more granular level, demand was highest for advertising and marketing professionals with 42,411 openings, followed by managing directors and chief executives at 36,656, with administrative and finance roles also featuring prominently.

The services sector underpinned much of this activity, contributing 84.4% of all online job advertisements in the quarter—up from 77.2% in the prior period—underscoring its continued centrality to Malaysia’s employment ecosystem, reported New Straits Times.

As HR leaders in Malaysia grapple with these converging pressures, CHRO Malaysia 2026 offers a timely forum to address them head-on. Organised by HRM Asia and taking place from 23-25 June 2026 at Sofitel Kuala Lumpur Damansara, the conference brings together senior HR and C-suite leaders under the theme “Leading with Purpose, Powering the Skills Economy.” Spanning a main conference and two workshops, the event will tackle the critical issues shaping Malaysia’s workforce—from skills-based talent models and ethical AI adoption to regulatory compliance and next-generation leadership. Find out more or register at https://chroseries.com/country/malaysia/.