SINGAPORE — Retrenchments in Singapore in 2023 were more than double that of the year before, according to advance labour market estimates released by the Manpower Ministry (MOM) on Wednesday (Jan 31).

The number of retrenchments in 2023 was 14,320, up from 6,440 in the year before.

Fewer people were laid off in the fourth quarter (3,200) than in the third quarter (4,110), driven by a fall in retrenchments in the wholesale trade sector. 

MOM said that the top reasons for retrenchments in 2023 were business reorganisation or restructuring, '"due in part to the impact of global economic headwinds on outward-oriented sectors such as wholesale trade, IT services and electronics manufacturing".

"Statistics on re-entry into retrenchment have so far showed that the majority of retrenched workers typically re-enter within six months post-retrenchment, and often in a different sector signalling the transferability of their skillsets," said MOM.

EMPLOYMENT

Total employment, excluding migrant domestic workers, rose by 8,400 in the final quarter of the year. It was also the ninth consecutive quarter that total employment had increased.

MOM noted that the growth in total employment has moderated "significantly" for both residents and non-residents as compared to previous quarters.

"This moderation was not unexpected as weaker hiring expectations and declining job vacancies from previous quarters indicated cooling labour demand," said MOM.

Resident employment growth was largely in domestic-oriented services such as health and social services and public administration and education. Retail trade and food and beverage services also received an employment boost, due to seasonal hiring.

"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," MOM said.

Unemployment rates were unchanged in December 2023 at 2 per cent overall, while rates remained "stable and low" for the full year of 2023.

2024 OUTLOOK

The Manpower Ministry said that its surveys indicate an improvement in business expectations, alongside the Ministry of Trade and Industry's expectation of improved economic growth prospects for 2024.

The report also highlighted some forward-looking indicators that seemed to suggest improved numbers in employment and wage growth. The proportion of firms with intention to either hire in the next three months or raise wages have risen, said MOM.

"Nevertheless, as downside risks in the global economy remain, business reorganisation or restructuring may lead to further retrenchments and unemployment rates may edge up," it added. CNA