Singapore labour landscape confronts challenges amid retrenchments surge
Singapore experienced a significant surge in retrenchments during 2023, more than doubling the figures from the previous year, according to advanced labour market estimates released by the Ministry of Manpower (MOM).
The number of retrenchments in 2023 soared to 14,320, compared to the 6,440 recorded in the preceding year. Despite a decrease in the fourth quarter with 3,200 job cuts, down from 4,110 in the third quarter, the overall trend underscored challenges faced by various sectors.
The decline in retrenchments in the wholesale trade sector played a pivotal role in the reduction, according to MOM. The ministry attributed the surge in retrenchments to business reorganisation or restructuring, primarily driven by the impact of global economic headwinds on outward-oriented sectors, including wholesale trade, IT services, and electronics manufacturing.
MOM highlighted those statistics on re-entry into the workforce indicated that most retrenched employees typically found new opportunities within six months post-retrenchment, often in different sectors, showcasing the transferability of their skillsets.
In terms of employment, the final quarter of 2023 witnessed an increase of 8,400 jobs, marking the ninth consecutive quarter of growth. However, MOM emphasised a significant moderation in total employment growth for both residents and non-residents compared to previous quarters. The shift was attributed to weaker hiring expectations and declining job vacancies, indicating a cooling labour demand.
“After the sharp, post-pandemic rebound in 2022, total employment growth for the full year of 2023 was moderate amidst weaker economic conditions (from 227,800 to 89,400),” said MOM. “The more muted pace of growth was seen for both residents and non-residents.”
Unemployment rates in December 2023 remained unchanged at 2% overall, and MOM described the rates for the full year as “stable and low”.
Looking ahead to 2024, MOM expressed optimism based on surveys indicating an improvement in business expectations. The ministry noted that the Ministry of Trade and Industry anticipates improved economic growth prospects for the year. However, the report also cautioned about potential downsides in the global economy, suggesting that business reorganisation or restructuring might lead to further retrenchments, and unemployment rates could edge up, reported CNA.