Retrenchments in Singapore more than doubled in 2023, MOM report shows

SINGAPORE - Retrenchments in Singapore more than doubled in 2023 from the previous year to 14,320, even as overall unemployment rates fell slightly.

Total employment growth here for the full year of 2023 slowed amid weaker economic conditions, following a sharp post-pandemic rebound in 2022.

According to preliminary estimates released by the Ministry of Manpower (MOM) on Jan 31, the more muted pace of growth was seen for both residents and non-residents.

On a quarterly basis, while the increase in total employment, excluding migrant domestic workers, moderated significantly, it continued to grow for the ninth consecutive quarter, expanding by 8,400 in the last quarter of 2023.

The ministry said: “This moderation was not unexpected as weaker hiring expectations and declining job vacancies from previous quarters indicated cooling labour demand.”

Business reorganisation or restructuring remained the top reason for retrenchments in 2023, due in part to the impact of global economic headwinds on outward-oriented sectors such as wholesale trade, information technology services and electronics manufacturing.

However, on a quarterly basis, the number of retrenchments in the fourth quarter of 2023 fell to 3,200 compared with 4,110 in the third quarter, which was marked by a surge in wholesale trade retrenchments.

MOM added: “While retrenchments rose in electronics manufacturing, the number of retrenchments in other sectors remained broadly stable or declined.”

For the full year of 2023, the overall unemployment rate dipped slightly to 1.9 per cent, from 2.1 per cent in 2022.

The rate for Singaporeans was 2.9 per cent in 2023, down from three per cent, while the rate for Singaporeans and permanent residents combined was 2.7 per cent, down from 2.9 per cent.

On a monthly, seasonally adjusted basis, the unemployment rates in December 2023 were the same as that in November. The overall rate was two per cent.

The ministry added that based on its surveys, it expects improved business expectations in 2024, with the Ministry of Trade and Industry also indicating expectations of improved economic growth prospects.

The MOM said the proportion of companies that indicated an intention to hire in the next three months rose from 42.8 per cent in the third quarter of 2023 to 47.7 per cent in the October to December period.

Likewise, the proportion of companies with an intention to raise wages rose from 18 per cent to 32.6 per cent over the corresponding periods.

While employment prospects might be looking up, MOM cautions that as downside risks in the global economy remain, business reorganisation or restructuring will continue and may lead to further retrenchments.

The ministry said: “The Government strongly encourages employers and workers to make full use of available programmes to remain competitive and resilient amid economic uncertainty.

“Employers should press on with business transformation and equip their workers for expanded or redesigned job roles. Workers are encouraged to continue to upskill and be open to new opportunities.”

This article was first published in The Straits Times. Permission required for reproduction.

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